Are looking for an effective way to wipe out your debts? If yes, Consumer Proposal is a perfect and easy method to do so. Basically, it is a legal agreement through which you make an offer to creditors to pay an amount less than the total outstanding amount owned over a period of time. The most interesting part of filing it is that the portions of debts that you are unable to pay are forgiven once you agreed to pay all the payments, and fulfilled all your duties.
Well, this proposal can only be filed with the help of a licensed bankruptcy trustee. There are many individuals who think that they only require hiring a trustee at the time of bankruptcy a proposal estate. At the time of filing it, the question arises that what debts can be included in a Consumer Proposal? It is one of the most important questions associated with it.
Through this proposal, you can prepare a payment plan and debt reduction strategies, you have to make sure your debts are eligible. The best part of it that all your unsecured debts are included, such as
• Department store cards
• Phone bills
• CRA debts, including income tax debt
• Credit card debts
• Lines of credit
But there are certain debts that can’t be included in the consumer proposal, such as court fines and penalties, student loans, child support, and alimony as well as maintenance. Another critical aspect is the Consumer Proposal Eligibility.
This proposal option is not available to businesses. And the individual should be considered insolvent, which means the inability to pay its debts as they become due. This can only happen if your debt is less than $250,000 (excluding the mortgage amount of your home).
If you have an amount exceeding $250,000, you need to seek for any other option. In case you file a joint one with your spouse, the debt sum can’t go above $500,000. To make things a little sorted hire a licensed trustee who can suggest you the ideal legal ways to get rid of debts. Here is a list of criteria that you need to accomplish for filing this proposal:
• You must be able to afford your proposal. In simple words, you should have a fixed source of income to pay the agreed monthly amount to your creditors.
• It should be accepted by the people you owe. Thus, you require offering them enough money to convince them. As per the rule of thumb, you need to pay them at least 33% of the outstanding amount.
• The amount can be divided into 60 easy monthly payments for not more than 5 years.
• You can’t have any other proposal open at the time you file it.
• You can only file it when both court and creditors approved it.
Being burdened by debt and finding difficulty in repaying it, this proposal is a great way to get rid of financial problems without worsening your situation. But you need to understand the Consumer Proposal eligibility to file it the right way.
