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If I don’t want to file for bankruptcy, what options do I have?
Residents of Kentville, Nova Scotia have a number of options available to them if they do not wish to file for bankruptcy. The options include things like a debt consolidation loan, a debt management plan, or a consumer proposal. Consumer proposals are the most popular alternative.
Debtors enjoy consumer proposals because they do not lose any of their assets, and because they can pay back their debts over an extended period of time.
Proposals are perfect for debtors who owe at least $5,000, who have a steady income, and who are capable of paying at least a portion of the debt.
Why should I file a consumer proposal?
The advantages of consumer proposals include:
- A maximum period of 5 years
- Frozen interest from the date of filing
- It is typically accepted by creditors
- You can negotiate to only pay a back a fraction of the debt
- Wage garnishments stop
- Creditors cannot pursue legal action
To start, a trustee will analyze your financial situation to determine the amount that you can afford to pay each month.
Your creditors then have 45 days to vote for or against your proposal. If a majority agrees that the proposal is satisfactory, it is deemed suitable by all. 15 days later if there are no arguments, the proposal will be accepted by the court. You and your creditor are now bound to the terms of the proposal.
However, If 25 percent or more creditors do not agree with your proposal, you must return to the drawing table. Your trustee will call a meeting of creditors to help you and your creditors agree on a realistic proposal. The proposal must include all creditors.
Throughout the proposal, you are permitted to miss up to two payments without being penalized. Two payments wills simply be added onto the end of the proposal in this case. If you miss more than two payments, however, your proposal will be annulled by the court, interest charges will be added to all debts, and creditors can apply to have your wages garnished.
Your credit rating will be adjusted to reflect your current situation, and you will also have a note attached to your report for up to seven years starting from the day that you filed.
Trustees are usually paid out of the proceeds of your proposal, and basic fees are determined by the Superintendent of Bankruptcy.
To learn more about consumer proposals, contact a licensed bankruptcy trustee in Kentville today. Our bankruptcy trustees will review all bankruptcy alternatives with you, and make sure a consumer proposal is truly your best option.
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