Consumer proposals Ontario: Make a federal case out of it!

Consumer proposals Ontario are governed by federal legislation; the Bankruptcy and Insolvency Act (Canada) (BIA). The proposal provisions used by companies and creatively used for people with extremely large debts is commonly referred to be “restructuring” or “reorganization”. In the United States, it is what is commonly called “Chapter 13 proceedings”.

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Consumer proposals Ontario: Debt solutions for the smaller debtor

However, there was no similar provision available to small individual debtors in the BIA. Parliament wished to find a way to offer these smaller consumer debtors to have a restructuring alternative. So, after consultation with the stakeholders in the Canadian insolvency world, in the 1990s, the consumer proposal process legislation was enacted. It benefits people who owe $250,000 or less (not including mortgages against your principal residence).

Consumer proposals Ontario: Avoiding personal bankruptcy in Canada

Now, the consumer proposal process provisions for consumer debtors are used more than the consumer bankruptcy provisions of the BIA. So Canadians are now avoiding personal bankruptcy more while still obtaining the help and counselling of a Licensed Insolvency Trustee.

The main use of the (consumer) proposal provisions of the BIA is to allow you as a debtor to keep your assets if you can afford to in your budget, it is a great way for how to avoid bankruptcy in Canada, and give a better alternative to your creditors than a bankruptcy would. In this way, you are allowed to be relieved of your debts, for an amount less than the total face value of all of your debts.

It is best used when you have extra income and can afford to pay back some debts if the рауmеnt plan is structured properly, but not enough income to pay back all of your debts, especially with penalties and interest! The consumer proposal legislation allows you to pay back less than you owe, but what you can afford. Interest and penalties stop and in most cases, you are able to settle your debt for less than 50 cents on the dollar.

You can structure your repayment plan in monthly payments for up to 60 months. Again, no interest or penalties. So, it is very much like an interest-free loan for less than half of your debt to settle all of your debts.

Consumer proposals Ontario: What should I do if I have too much debt?

So if you’rе ѕtіll dеtеrmіnеd to рау your debts in full but you can’t see a way to ассоmрlіѕh that goal, this may be just the ѕесrеt you need to know! If you’re a Canadian with financial concerns seek the counsel of a professional trustee.

We can help you deal with how to solve your financial problems while you still have options available to you so that Starting Over, Starting Now you can be on your way to enjoying financial health. Make an appointment with us for a free, no obligation with the Ira Smith Team today. You’ll be happy you did.