Assets are the most dominant rationalization behind considering for filing for consumer proposal as an alternative to bankruptcy. It’s an easier way of debt reduction without losing your valuable assets such as a home. In other words, you get to keep all your assets but still reduce your debts.
2) Protection from creditors
Once you file for consumer protection from your creditors under the supervision of a consumer proposal trustee, you’ll protect your assets from being seized and all garnishments will stop. On the other hand, bankruptcy will lead to the seizure of certain assets depending on your allowable exceptions. However, it’s vital to note that every province has specific exceptions when it comes to these assets.
3) Easier management of payments
The standards of payment are not predetermined before the filing of the proposal and thus it’s designed to meet a wide range of debt situations. It’s up to you to decide on the proposal percentage that you make of the unsecured debts with your creditors. The percentage will be a general reflection of your payment capabilities and your income timing. People who have a reliable source of income can always qualify to make consumer proposals. Moreover, the payment is so manageable because you don’t have pay added interests within the months of between 48 and 60.
4) Credit recovery
Most people are often concerned about their credit rating when filing for credit reduction options. The important thing to keep in mind is that your credit rating has already been demolished by the missed payments. A proposal is treated as an R7 and bankruptcy as an R9 by the reporting agencies. Once you get the completion certification, the consumer proposal will remain in the credit bureau for three years while the bankruptcy will stay for six years after receiving a certificate of discharge from the bankruptcy trustee. In other words, repairing your credit and rehabilitating your financial status and remain vigilant in paying your debts is a continuous process that will require effort, discipline, and time.