On a daily basis the consultants at DebtCare Canada receive interest from clients who believe what they require is a debt consolidation plan. In most cases, after going through their budget we can demonstrate that their issue has not been remembering to pay six creditors at the end of every month, but more a case of not having enough money to pay all their creditors each month. Many debtors feel if they had only one payment to make this would solve their problem, but when you have a shortfall in your budget it doesn’t matter whether you pay one creditor or six. You cannot pay them all. This is when a consumer proposal, a program offered by the federal government provides a significant reduction of debt. Your debts can be reduced to as low as 70% of what you owe. This reduced debt is now interest free, and offered over a five year repayment plan.

Consumer Proposals

It’s the end of the month and the bills are due. You’ve got a good job. You can afford to pay, just not as much as everyone wants. What do you do? If you find yourself in this situation month after month then you might want to consider debt negotiation and settlement by making a consumer proposal to your creditors.

What is a Consumer Proposal?

Debt negotiation and settlement through a proposal to creditors is similar in concept to a Debt Management Plan: you can afford to repay a portion (or all) of your debts; you simply need more time to pay.

In general, a Consumer Proposal is an appropriate form of debt negotiation and settlement in situations when:

• a person’s debts exceed $5,000, to a maximum of $250,000;
• the debtor has the ability to repay a portion of their debt;
• and the debtor is looking for a bankruptcy alternative (rather than a personal bankruptcy) that can solve their problems.