The Consumer Proposal – What Is It, Really?
It is very likely that if you are digging deep into finding what solutions are available to you to fix your debt problem, you have heard about the Consumer Proposal. The Consumer Proposal has become increasingly common as opposed to personal bankruptcy, and the reasons and theories as to why its use has increased are varied.
One thing that certainly has increased the use of the Consumer Proposal is the stigma attached to the idea of filing a Consumer Proposal as opposed to the idea of declaring personal bankruptcy. While credit rating suffers a similar fate in both circumstances, from our years of experience, it is apparent that the proposal is more attractive as a term to describe a way to fix your debt. We are often asked which is better, and the answer we give is that it depends on a number of factors.
Perhaps the most important factor to determine whether or not a Consumer Proposal as opposed to a bankruptcy is the better solution, is whether or not you, as the debtor, could file a proposal and make the required payments. It is not a question of wanting to a make or file a proposal – the better question is CAN you do a proposal? Can you afford a monthly payment that would result in a return to the unsecured creditors that would be more than a bankruptcy? In the end, just how much the creditors would receive in a bankruptcy is crucial to determining how much should be offered in the proposal.
The best way to find out what the payment in a Consumer Proposal would be is to sit down with us and we shall assess your situation. Do you have equity in your property? Would a bankruptcy scenario require you to make surplus income payments? Are you a director of a corporation? Are you involved in a lawsuit? There are a numerous questions that we must ask to determine whether or not there are issues that would affect you and your decision as to whether or not you should file a Consumer Proposal.
So please click here or call and make an appointment and the right answers. We will be happy to assist.
Howard Landau is a licensed trustee in Toronto specializing in bankruptcy, consumer proposals, personal income tax debt and other CRA debt that individuals are faced with.