Consumer proposals are great options for people who don’t want to declare bankruptcy. You can agree to a consumer proposal Toronto with your creditor and legally file. This protects you from various debt collectors and will allow you to just pay the portion of your debt that you are able to. Your creditor will be a licensed bankruptcy trustee, so you can be sure to address all your debt woes with him or her.

Your creditors and you agree on a specific amount that you have to pay back when you file a consumer proposal. The rest of your debt balance is forgive, and will thus give you some peace of mind from the otherwise daunting amount. You’ll find that this kind of proposals provide both benefits and restrictions.

Once you file, your wage garnishments will cease, there won’t be any additional interest, and debt collection companies will stop asking for payment. Unlike bankruptcy, you aren’t liable for house foreclosure or loss of other assets. Additionally, you are able to pay that portion of the debt within 5 years.

As mentioned, your home and other assets are safe from collection, but they are also safe from temporary seizure from your creditor during the 5 years you make payments. Surplus income is also not a concern, which is the same as in bankruptcy filings. Another important factor to know is that your payment amount will never increase, even if you end up obtaining a higher income while you pay.

The credit score drop you get from proposals like this is a lot better than what you’d get with bankruptcy. Bankruptcy will provide you with a R9 rating, while consumer proposals provide a R7 one. Keep in mind that an R9 rating is the lowest rank you can obtain, causing a lot of damage on your credit score.

You aren’t the only one benefiting from this filing. Your creditors, while they aren’t receiving the full debt amount, receive at least some portion. If you were to go bankrupt, they would not receive anything. Therefore, if you really are in a place where you can only pay a partial amount of your debts, the creditors welcome this alternative.

Make sure your debt total ranges between five thousand dollars and two hundred fifty thousand dollars, as this is the range that makes you eligible for a consumer proposal. If you have a stable job and are able to make regular monthly payments, can’t seem to get a debt consolidation loan because your balance is way too high, aren’t possibly able to pay the full debt and interest amounts, or want to avoid bankruptcy so you don’t have to make surplus income payments; you can definitely contact your creditors to file a consumer proposal. As mentioned before, your home and assets are also safe from any collection.

There still are some limitations to consumer proposals. You won’t be able to pick which debts you want to pay, since your creditors will decide the dispersal. You also won’t be able to avoid alimony or spousal support, some student loans, or home mortgage and car loan obligations. Your creditor will give you further detailed information on what qualifies and what doesn’t in consumer proposals.

You can visit www.empireonecredit.com for more helpful information about Choose A Consumer Proposal Toronto Over Bankruptcy.