How a Consumer Proposal Saves you Money

this post answers the following questions
1. What is consumer proposal?
2. How consumer proposal does works?
3. What is the length of the agreement when filing a consumer proposal?
4. What are the benefits of consumer proposal?
5. What are the qualifications of consumer proposal?


These consumers did not mean to fall into debt that they will never be able to repay. They were employed and making at least the monthly payments when they lost their jobs and they were unable to keep up. Another scenario is that they fell ill and were left with medical bills they needed to charge on their credit cards. Now that they are working again and in better health, the option of the consumer proposal Ontario has to offer may be the solution that these consumers need to help them out of debt.

The Option of the Consumer Proposal

This option is an alternative to bankruptcy and allows consumers to offer their creditors a settlement for less than they owe. Creditors know that the other option is bankruptcy, and that option does not appeal to them because they may receive very little of what they are owed. With a consumer proposal, creditors have the chance to collect between one third and one half of the amount they are owed, and this is preferable to them than the alternative.

The Length of the Agreement

The consumer proposal is a legal agreement that requires that consumers obtain the services of a licensed federal government worker. When they have their first consultations with their representatives, they determine how much monthly income their clients can realistically afford to offer to their creditors in the form of a settlement. The terms of the agreement can only last for a maximum of five years.

During the five year period, the consumers will make one monthly payment that will be disbursed to all of their creditors. Because the creditors agreed to accept this settlement, they also agreed to write off the remainder of the balance and never seek to collect it. After the consumers are finished paying, they will be 100 percent debt-free.

The Benefits of the Consumer Proposal

Obtaining a consumer proposal Ontario benefits consumers in several ways. One is that consumers are not required to pay their debts in full after their creditors agree to a reduced amount. This eliminates their debts in a much shorter period of time than if they were to pay them in full and helps them rebuild their credit faster.

The consumer proposal offers more advantages than bankruptcy because the consumers’ assets are never in jeopardy. As their income increases over the years, they are not required to increase the amount they pay their creditors as they would with a bankruptcy. They can also keep everything they are owed in their tax refunds.

The Qualifications for a Consumer Proposal

First, consumers must be in good enough financial standing to make an offer to their creditors for a settlement that they will repay in monthly installments. If they have assets that would amount to a greater sum than the amount they owe, they will not qualify for this solution. Lastly, they can only have unsecured debt amounting to not more than $250,000. With all of these qualifications met, these consumers may be on their way to being debt-free in the very near future.

When making the choice of consumer proposal, Ontario residents turn to Doyle Salewski Inc. – Ottawa credit counseller and trustee in Bankruptcy located in Ottawa able to help those in need.

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