Filing a Consumer Proposal to Protect Assets

Filing for bankruptcy may seem like the only option when you are bogged down by a lot of debts. This confirms that you are incapable of paying their debts, which is quite a relief. However, filing for bankruptcy also comes with repercussions where some of your prized assets are usually seized.

In this case, a trustee assumes control of these assets and uses them to pay off the debts owed by you. Normally, these assets are liquidated and the creditors benefit from the proceeds. This is an unpleasant situation that could sink you further into financial oblivion.

Nevertheless, it is possible for you to avoid the pitfalls of bankruptcy by opting for a consumers proposal. Unlike filing for bankruptcy, consumer proposal does not mean that your assets will be snatched from you. As such, not a single asset will be taken up by a trustee. Also, filing a consumer proposal effectively halts any legal proceedings against you. Furthermore, you are protected from the risk of losing your job. If you own a public utility, a consumer proposal allows you to continue with your operations as normal.

Filing a consumer proposal

Filing a consumers proposal is an exercise that requires adequate preparations coupled with accurate execution. You must also be in the know about the steps and things to do while filing your proposal. Some of the must-do things during the process include:

· Get a trustee

It is important that you have a trustee with you throughout the whole process. This means that you must engage his or her services at the earliest instance. A trustee would prove an important companion during the filing process. For example, he or she would assist you in gathering your financial information. Their wealth of expertise is also integral in figuring out your highest possible monthly payment. With the assistance of the trustee, you must conduct a comparison of your debts and your monthly payment. This will enable you to estimate the duration it would take you to clear your debts.

· Writing the proposal

The next process involves the drafting of the proposal. Of course, you can do this with the assistance of your trustee. The trustee would be helpful in making contact with the creditors. His or her expertise would be instrumental in steering the filing process through murky waters.

· Filing the proposal

The onus then falls on you to file the required documents with your creditors. Only then will your creditors officially grant approval to your proposal. As per legal provisions, the creditors must accept or turn down your proposal within 45 days. It would go through if it gains the approval of 51% of the creditors. Alternatively, the court could grant your proposal if no creditor accepts or rejects the proposal within 15 days after filing.

· Accepting the proposal

After the passing of the consumers proposal by the court, it is your turn to accept it alongside your creditors. One thing of note is the need to adhere to the proposal by fulfilling the agreed amounts. Failure to do this would ultimately expose you to an annulment courtesy of the court.

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This post was provided by Gary Parker, a financial guru, specialized in personal finance. He suggest filing for a consumers proposal at a firm who specializes in insolvency matters, like Andre Gabbay et Associes Inc.

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