Newmarket’s Debt
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Consumer Proposal vs. Bankruptcy

More and more Canadians are taking on consumer proposal as a solution to debt problems. Most people were not aware of consumer proposal until the past couple of years and many opted for bankruptcy in insolvency cases. At York Credit Services, we believe in providing consumers with accurate and informative knowledge on the financial options available. Everyone’s case is different and this is why we customize our services to the needs of our clients. It all begins with Newmarket credit counseling where we get to learn more about the individual and their financial challenges. From these interactions, we can determine whether a consumer proposal or filing for bankruptcy would be best. Our debt relief specialists have loads of experience and the professionalism to handle these matters.

What is a consumer proposal?

Consumer proposal refers to the negotiated agreement between you and your creditors through a consumer proposal administrator. When we negotiate for this agreement, we will develop a legal document that will protect you from debt collectors who can be quite determined when chasing after debts. The agreement will also include a partial repayment of the total unsecured debt that you owe while the creditors will write off the rest of the balance. The consumer proposal process requires the input of a Newmarket debt relief specialist who understands the law and loopholes that can used to get the creditors on board.

When it comes to credit solutions, no one-size-fits-all solution apologies and this is why bankruptcy could still be a viable option to others. Speaking with a credit counselor can shed a lot of light on the options for debt relief depending on individual financial characteristics. At York Credit Services, we believe that financial information should be available to all our clients in an honest and easy to understand manner so they can make the best decisions to improve their finances.

We can help you avoid bankruptcy

Consumer Proposal vs. Bankruptcy

Bankruptcy is often considered as a more drastic solution due to the perceived repercussions of choosing this route. Consumer Proposal and Bankruptcy also do posses some similarities

Both bankruptcy and credit protection protect you from the nagging calls of debt collectors

However, in a consumer proposal, no assets can be seized by creditors. With bankruptcy, some specific assets can be seized by creditors but the exceptions vary from province to province. Consumer proposal is simply considered a better solution because you get to keep all your assets; these debt reduction solutions can ensure your family does not end up homeless.

In a consumer proposal, the agreement will include manageable payments

Payments are designed for your income bracket. With consumer proposals there are no standards that dictate how much this should be and the payment solution is completely customized. Consumer proposal is therefore great for individuals with a reliable income source. Bankruptcy can be critical if there is no reliable income source that can help you make these payments. The biggest challenge with bankruptcy is the stigma that comes with it and it can affect some professional designations or business license eligibility among other complications.

Qualify for both bankruptcy and consumer proposal

Anyone who is insolvent and unable to pay their debts can qualify for both bankruptcy and consumer proposal. However, your creditors have to agree to your proposal in order to implement the agreement. Most often creditors are willing to settle for a lower amount as long as payment is guaranteed. With bankruptcy, creditors have no choice but to accept the situation as it is and some of them may never receive any kind of payment.

Consumer proposal

The consumer proposal can guarantee an immediate financial improvement. Once your creditors agree to these payments, you are already on your way to financial recovery. You do not need to pay more money towards these agreements even if you start making more money allowing you to save up for the future. With this in mind, a lot of consideration is necessary before filing for bankruptcy as these records will remain in your credit report for a couple of years to come.

The consumer proposal process is not complicated and our Newmarket debt consolidation and debt relief experts will help you navigate and complete the process as soon as possible.

“We are committed to reducing your debt and getting you back on the right financial track.”