Dealing with Debt Relief in Canada: A Quick Look at Consumer Proposals

Being knee-deep in debt payments can be very bothersome, especially if you are a senior. This is the case with June and Todd, a couple in their mid-60s who are trying their best to get out of debt so that they can finally retire fully. The couple owe more than $45,000, and most of their debt carries interest rates of higher than 11 per cent. Due to this, their retirement income is not enough for their debts and for their living expenses.

The silver lining here is that June and Todd are good candidates for debt relief in Canada called a consumer proposal. This is ideal for people whose debts do not exceed $250,000. It is a formal process that is legally binding where the bankruptcy trustee will work with a person to develop a “proposal”. This is basically a proposition to pay creditors a percentage of what is due them or increase the amount of time to pay off the debts. In some cases, both can be done. A consumer proposal’s term cannot go beyond five years.

A consumer proposal is advantageous in a number of ways. First of all, assets are not at risk and it will not be necessary to surrender them as part of the proposal agreement. Furthermore, the payments will not increase in value as the income increases once the proposal has been agreed upon. There will still be a negative impact on the credit score, but not as serious as it would be with bankruptcy.

The sense of control over paying off debts is one thing that people love about consumer proposals. A consumer proposal is a great solution if the debts are over $5,000 but not exceeding $250,000. Also, if the person is not able to pay their debts with full interest and is unable to get a debt consolidation, then this is for them. Of course, they must be able to make a part of their payments each month.

Those who have debts that they are having difficulty paying off should really consider consumer proposals. They can get more information on this reliable debt relief program from consultants such as Blair Greenwood, who is an independent 4 Pillars consultant working on behalf of the debtor, not the creditor. This results in structuring the best possible proposal providing an effective solution to financial challenges.

(Crushed by credit, Winnipeg Free Press, April 4, 2015)