|
One way to avoid bankruptcy in Canada is to file what they call a Consumer Proposal. A Consumer Proposal is a deal that is worked out between the debtor and the creditors. A standard proposal would have a debtor possibly making monthly payments for a maximum of 5 years. In America, Chapter 13 has the reorganization plan that also allows a repayment of 5 years but the difference is that in the United States you have to file bankruptcy to be the same result. In Canada there is no claim of bankruptcy and your credit report stays clean.
In most of the proposals the payments are a bit lower than what is the true debt is. Creditors more often than not accept the deals because to them they are receiving some type of payment rather than have zero payments. It is logical and it turns out not to be a wash the debtor is responsible for their debt and the creditor gets something. Once a debtor offers this proposal then the creditors have 45 days to accept or reject it, if the proposal is accepted then the debtor will begin making payments to the Proposal Administrator every month and in turn the creditors are not allowed to call, write or harass the debtor in any way. But in the rare cases of a rejection then the debtor may have no other choice than to declare bankruptcy. A Consumer Proposal can only be made by a debtor whose debt is more than $ 5000 and a maximum of $ 75,000, it the debt happens to be more than $ 75,000 then the proposal must be filed under the Division I of Part III of the Bankruptcy and Insolvency Act. In any case you will need the help of a Proposal Administrator is required. A Proposal Administrator is a licensed trustee in bankruptcy but other people may be assigned to serve as administrators. The main point to filing a Consumer Proposal is that it avoids the black mark of bankruptcy on your credit report. You really want to avoid bankruptcy to save your credit if nothing else. Laws have changed in many countries making it harder to not be responsible in one way or another. By filing a Consumer Proposal it allows both sides to benefit from a repayment plan. The creditor is likely not to get the entire debt but it is better than getting nothing or taking their chances in bankruptcy, which can result in getting less money they would in a Consumer Proposal. The debtor does not get away scot free from their debt either. So in the interest of both parties a Consumer Proposal will serve a double purpose. It does benefit the debtor more because they get a reduced debt, they have 5 years to pay it off and they will not be harassed by collection agencies anymore. If you have more than one creditor it is possible to strike a deal with each. Oral Nicholson wants to teach you about Bankruptcy Law and will show you proven techniques and statergies to get you out of debt without bankruptcy. For bankruptcy information visit http://www.filing-bankruptcy.info |
