Bankruptcy can happen in no time. Especially in business, if you do not take the risk carefully, then your creditors whom you need to pay money also increases. Here comes the role of a consumer proposal. Consumer proposals Toronto says that an arrangement that can be made with the creditors through an administrator who holds an Insolvency Trustee license. According to www.attorneys.com, this legal document can save you from the debt collectors. The arrangement is a partial repayment of the total sum you need to pay to the creditors. A consumer proposal agreement says that it is a mutual understanding between you and creditors saying that you will pay a portion of the amount and creditors can write off the rest.
When a consumer proposal gets filed, the wage garnishments stop quickly. You will not be charged for any interest after the date you have filed the proposal. No debt collectors, as well as the creditors, can come to you and ask for the money. If they do, then it is against the law, and you have the authority to report it to the police. You are safe, and you will not lose your home. Because when you file the proposal, you agree to declare yourself as bankrupt. You can repay the amount agreed within a period of five years. That is what the law suggests.
Once the consumer proposal is filed, your assets will be safe and will not be at the risk of losing. It need not be surrendered. Not only this, when the consumer proposal is accepted, then even if there is a rise in your income, it will not result in the pay increase. Whatever that is mentioned in the proposal is valid now, no matter you get more income. Your credit rating will not go less as in cases of bankruptcy. However, it will be affected but not like bankruptcy. So, make sure that you are aware of these things before filing the proposals.
When you have been declared as bankrupt, then the creditors will not get even a penny from you. However, if you are filing a proposal, they can at least get a portion of the money which they have paid you. Because of this reason, a creditor agrees to the consumer proposals than bankruptcy. It is better to recover some amount than nothing.
A consumer proposal can be filed if the debts are more than $5000 and below $25000. You can give a portion because you have a job and a salary. In some cases, you will not be able to pay the full amount or to pay with interest. Because you have an income, you do not want to declare yourself as a bankrupt as it can affect you in future. However, if you feel that you cannot pay the full amount to all the creditors, then the consumer proposal is the best thing to get some burden off. For getting a clear idea about the consumer proposals, you can meet attorneys and tell them about the issue completely so that they can help you in filing the proposal.