Should you file a proposal to your creditors? – If you have consistent income and are able to make monthly payments to your creditors, but are unable to pay the amount your creditors are requesting, a proposal may be a good option.
Proposals are a formal arrangement between you and your creditors, administered by a licensed trustee in bankruptcy. Unlike the Debt Management Plans offered by Credit Counselors, proposals are covered by the Bankruptcy and Insolvency Act. This legislation provides you with protection from your creditors and forces your creditors to participate in the process. Also, proposals provide you with the ability to compromise the total amount you owe (i.e.: payback less than the total amount owed).
When you file a consumer proposal the Bankruptcy and Insolvency Act protects you from your creditors by preventing them from taking any further legal or collection action against you, and stopping all interest charges.
Filing a consumer proposal can be a better option to deal with money problems than filing personal bankruptcy.
-Chris Welker
