If you’re overwhelmed by debt and can’t seem to get ahead because of mounting interest, there is a solution: a consumer proposal. This legal option can help you regain control by freezing interest and allowing you to pay off your debt over a set period.
Sabrina Clarke, Head for Consumer Proposals at Goldhar & Associates, explains how consumer proposals work and how they can provide a path to financial recovery.
What is a Consumer Proposal?
A consumer proposal is a formal, legally binding agreement between you and your creditors. It allows you to pay back a portion of what you owe over a period of up to five years, without interest accruing during that time. In many cases, it can reduce the amount you need to repay significantly.
Key Benefits of Consumer Proposals
- Freeze Interest: Once you file a consumer proposal, your creditors must stop charging interest, making it easier to pay down your debt.
- Protection from Creditors: The proposal also prevents creditors from taking legal action against you, including wage garnishments or collection calls.
- Manageable Payments: The amount you’ll repay is based on what you can afford, which is a huge relief compared to making payments that are too high for your budget.
- Debt Reduction: Often, consumer proposals allow you to pay back only a fraction of what you owe, which can make a significant difference in your financial future.
How It Works
- Consultation: You meet with a Licensed Insolvency Trustee (LIT), like Sabrina Clarke, to discuss your situation. Sabrina will assess your debt and finances to determine if a consumer proposal is a suitable option for you.
- Proposal Creation: The LIT drafts a proposal that includes a realistic repayment plan. This is then presented to your creditors for approval.
- Approval and Repayment: Once the creditors approve the proposal, you begin making monthly payments as agreed. During this time, you won’t need to worry about interest or additional legal pressure.
Why Choose a Consumer Proposal?
Consumer proposals can be a powerful tool for people who want to regain financial control without declaring bankruptcy. They offer the chance to reduce debt, stop interest, and move towards a future free from the weight of financial stress.
At Goldhar & Associates, Sabrina Clarke and our team are ready to guide you through the consumer proposal process, ensuring you understand each step and the benefits it brings.
Learn more about consumer proposals here