These days, it doesn’t seem like the question should be “if” someone is carrying debt, but “how” they plan to erase it. Debt problems are a common part of modern life, and there are an increasing number of solutions designed to set you free.
One option that seems to be growing in popularity is known as a consumer proposal.
What Is a Consumer Proposal?
A consumer proposal refers to a legal arrangement between you and your creditors. The arrangement or contract is negotiated by a bankruptcy trustee, and basically you end up only having to pay back a percentage of the total debt you owe. A payment schedule is put into place, and then you start making payments, until the agreed upon amount is paid off. Many people love the sound of only paying back a portion of their overall debt, but this solution isn’t for everyone.
It Can’t Help with Everything
It’s important to note that a consumer proposal won’t include every single debt or type of debt that you owe. You can’t just pick and choose which debts to include in the proposal, so depending on your situation, you still might have full payments to make.
A consumer proposal doesn’t include any of your secured debts, and you can’t include things like student loans or support and alimony payments, either. If these make up a good portion of your debt, then this solution probably isn’t right for you.
Credit Rating Consequences
If you’re concerned about your credit rating, then looking elsewhere is likely a wise choice. Just the act of filing a consumer proposal will alter your credit score for the duration of the proposal, until you have it paid in full.
Even after you’ve completed the payments, a note may stay in your record for up to three more years. This can affect personal loans, business ventures, mortgages or any other kind of credit you may want to apply for in the coming few years.
May Need to Sell Some Assets
Sometimes, you may need to sell off some of your assets as part of a consumer proposal. Naturally, this is hardly ideal and it’s something that many people don’t know until they are well into the process. You may even be forced to file for bankruptcy if you don’t meet the criteria of the proposal, or miss a couple of monthly payments.
It’s definitely wise to consider all of your options before you jump into a proposal or other similar solution. Most debt solutions that seem a little too good to be true seem that way for a reason, and take a look at more traditional fixes like personal loans before you proceed.
So before you go turn to a consumer proposal, make sure you look into your options, including a personal loan from a private lender to help you get out of debt. Find out if you qualify for a bad credit loan from Fast Access Finance.