If you’re thinking of filing a consumer proposal in Ontario, here are some facts for you.
In 2016, 22,956 consumer proposals were filed in Ontario. Nationally, 63,471 consumer proposals were filed across Canada. Both figures are up from 2015, meaning the number of Ontarians and Canadians filing consumer proposals is increasing. At the same time, the number of people filing for bankruptcy decreased slightly between 2015 and 2016.
Canadian household debt is growing — it’s currently at the highest it’s ever been. Easy access to credit and increasing interest rates are meaning people owe more than ever without a plan to pay it all off. A consumer proposal can be an alternative to making an application for personal bankruptcy, which is perhaps why it’s become more popular in recent years.
If you’re thinking of filing a consumer proposal in Ontario, you likely already know its definition. But to recap, a consumer proposal is a formal offer to your creditors to settle your debts, usually for an amount less than what is owing, but for a greater amount than the creditors would receive if you filed for bankruptcy. You offer to pay an amount that you can realistically afford for a fixed period of time – often up to five years.
The benefit of a consumer proposal over a bankruptcy is that you generally get to keep your assets. Often in bankruptcy, assets that can’t be paid for must be repossessed. Not so in the consumer proposal process. If your consumer proposal is approved by your creditors you will have a binding debt repayment contract. You can make your payments as agreed and you will have no further obligations to your creditors.
At Spergel, our Licensed Insolvency Trustees can create a customized consumer proposal for you that can set up a payment schedule with payments in higher or lower values at certain times each year, depending when you need more or less money. When you choose Spergel for filing your consumer proposal in Ontario, harassing collection calls and garnishments stop immediately after your proposal is filed.
If you have a high level of debt, but want to maintain your assets and lifestyle and can make set monthly payments, the consumer proposal process could be right for you. A Licensed Insolvency Trustee, such as the experts at Spergel, can help you determine if it’s a viable option.
To find out more about filing a consumer proposal in Ontario with Spergel, contact us today for a free consultation: 310-4321.