Importance of a Consumer Proposal
Documents that are approved by the government in Canada to help the citizens pay their debts in an easy way are called consumer proposal. It is the most preferred way to settle debts by most people than using bankruptcy method. It is very normal for people in one point of life to find themselves in debts that are so hard to settle and so they either choose to declare themselves bankrupt or to file a consumer proposal. The reason as to why most people prefer consumer proposal to bankruptcy is because of the many disadvantages that bankruptcy has. When you file a consumer proposal it becomes very easy for you to pay your debts because the agreement protects you from debt collectors pressure and stress. Most of the creditors prefer the consumer proposal deal to the bankruptcy one because they at least get some partial payment. When you qualify for a consumer proposal agreement which half of your creditors should accept for you to qualify, you attend two credit counseling sessions to be guided on budgeting skills. Some of the consumer proposal benefits are discussed below.
A consumer proposal helps you to protect your property including cars, houses and any other asset that you might own. This gives you a lot of peace of mind because even as you do your daily activities you are not stressed of your property getting away with the creditors. If you start earning more, you still continue paying the same amount as agreed before. When you declare yourself bankrupt it means your property can be taken by the creditors anytime and this is not a good idea so if you have debts that you find hard to pay it is good to take a consumer proposal so as to save your assets.
When you get the consumer proposal, you are able to pay lower monthly payments. A consumer proposal is good because it helps people pay their debt by giving them the plan on how to settle the debts. Most debts are even at times reduced by a very big percentage of the actual debt that someone has. People prefer the consumer proposal because it is one of the best and safest option of debt consolidation which is available. There are some savings got over debt consolidation because no interests during the consumer proposal period.
Once you file a consumer agreement, you are able to get creditor protection. This creditor protection allows you to have peace because no creditor disturbs or gives you pressure because there is a plan on how to pay them. As long as your consumer proposal has been accepted by half of your creditors then all the creditors should adhere to the terms and conditions of the proposal. Just like other acts, the consumer proposal is an agreement under the act of bankruptcy and insolvency.