On this page, we compare a consumer proposal vs bankruptcy as the two most common formal debt settlement<\/a> options. Bankruptcy<\/a> is just one form of debt resolution, and it is typically a last resort. Knowing your options can save you not only thousands of dollars but also give you peace of mind about your financial future. <\/strong>At Goth & Company<\/a>, we want to ensure you have all the information you need to make the best debt management decisions for you<\/em>. In this article, we explain the top debt relief options in Canada.<\/p>\n For the majority of Canadians who find themselves with significant debt, consumer proposals and bankruptcy are the most common alternatives.<\/strong> Both legally binding procedures will eliminate your debts and guarantee creditor protection, giving you the opportunity for a fresh start. Let\u2019s explore the differences.<\/p>\n A consumer proposal <\/em>is a contractual agreement between you and your creditors that allows repayment of what is owed at a considerably lower rate, over an extended period of time. By law, a proposal can only be filed by a Licensed Insolvency Trustee. Your LIT will evaluate your finances and, based on what you can afford; they will put together an offer for your creditors.<\/p>\n Bankruptcy<\/em> eliminates your debts through a process of surrendering your assets and surplus income. If you are looking to clear your debts as quickly as possible, this may be the best type of debt resolution for you. If this is your first time declaring bankruptcy, your debts can likely be absolved within 9 months from the time of filing. For those who are filing for bankruptcy a second time, or have a high income, clearing debt may take up to a maximum of 21 months.<\/p>\n Are your total debts are less than $250,000, not including a home mortgage or vehicle? Are you able to pay at least 30% of your debts? A consumer proposal might be a great fit for you.<\/p>\n We know that one debt solution does not fit all, and a consumer proposal may not be the right answer for every situation. Because consumer proposals and bankruptcy work so differently, it is important to understand how each one works.<\/p>\n All persons who file for bankruptcy or a consumer proposal are required by law to attend two credit counselling sessions.<\/strong><\/p>\n <\/p>\n Despite their differences, consumer proposals and bankruptcy both guarantee protection from creditors and debt resolution. <\/em>Every debt story is unique. Your personal income, assets, family circumstances, and future goals should be the primary deciding factors. A licensed professional will be equipped to help you navigate all the paperwork and numbers, and help you choose the best debt solution.<\/p>\n <\/p>\n Broadly speaking, debt settlement<\/a> can take many forms. A consumer proposal<\/a>, for instance, is a form of debt settlement. However, this is very different from the \u2018debt settlement\u2019 plans that are often advertised by small agencies.<\/p>\n Many companies offer attractive settlement plans, but there is no guarantee that your settlement will be accepted<\/em>, and clients are often charged service fees. These types of debt settlements are considered informal and are not regulated by the federal government<\/a>. As such, they cannot guarantee protection from creditors who wish to take legal action, garnishee wages, or hound you with collection calls.<\/strong> This can be especially problematic as many companies will wait several months to years to contact your creditors with a settlement offer. Any payments that might have been made towards debts are rerouted to the agency with the goal of accumulating a significant amount of money to offer as a settlement eventually. But this process can take years, especially since clients are typically required to pay various company fees, which are sometimes hidden.<\/p>\n <\/p>\n While there are different forms of debt consolidation, the most common method is to fold smaller debts into a single loan. This eliminates the hassle of multiple monthly payments. Ideally, the interest rate will also be lower with a single loan.<\/p>\n There are significant advantages to this type of debt management: <\/em><\/p>\n There are potential disadvantages to debt consolidation: <\/em><\/p>\n Consolidating debt can be an excellent debt management strategy, but it is not a debt resolution. You still have debt, and you still pay interest. <\/strong>In the event that you are unable to make your payments, any assets leveraged in the acquisition of your loan may be at risk of repossession.<\/p>\n <\/p>\n Are you struggling with your debt and unsure where to turn? At Goth & Company<\/a>, you will talk with a Licensed Insolvency Trustee<\/a> who will offer compassionate and educated advice. There is no cost. You are under no obligation. Call <\/strong>1.780.435.5110 to connect <\/strong>with any one of our six conveniently located offices throughout Edmonton and Northern Alberta. <\/strong><\/p>\n[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]\n","protected":false},"excerpt":{"rendered":" Consumer Proposals vs. Bankruptcy On this page, we compare a consumer proposal vs bankruptcy as the two most common formal debt settlement options. Bankruptcy is just one form of debt resolution, and it is typically a last resort. Knowing your options can save you not only thousands of dollars but also give you peace of […]<\/p>\n","protected":false},"author":1,"featured_media":768,"parent":364,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"yoast_head":"\n<\/h2>\n
Consumer Proposal vs. Bankruptcy <\/strong><\/h2>\n
What\u2019s the difference?<\/h3>\n
Is a Consumer Proposal<\/a> right for you?<\/h3>\n
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Consumer Proposal vs Bankruptcy: Eligibility Requirements<\/strong><\/h2>\n
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Consumer Proposal vs Bankruptcy: The Resolution Process<\/strong><\/h2>\n
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Consumer Proposal vs Bankruptcy: Terms & Conditions<\/strong><\/h2>\n
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Consumer Proposal vs Bankruptcy: Treatment of Assets<\/strong><\/h2>\n
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Consumer Proposal vs Bankruptcy: Increases in Income<\/strong><\/h2>\n
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Consumer Proposal vs Bankruptcy: Credit Scores<\/strong><\/h2>\n
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Consumer Proposal vs Bankruptcy: Monthly Obligations<\/strong><\/h2>\n
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Consumer Proposal vs Bankruptcy: Tax Refunds<\/strong><\/h2>\n
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Which one is right for you?<\/h2>\n
What is \u2018Debt Settlement<\/a>\u2019 exactly?<\/h3>\n
What about debt consolidation<\/a>?<\/h3>\n
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Consumer Proposal vs Bankruptcy vs Informal Debt Settlement<\/h2>\n
Taking the first step!<\/h3>\n