Have You Been the Best Choice for a Customer Propsal

De BISAWiki

Settling debts through a consumer proposal is a debt management strategy whereby borrowers pay only a portion of what they owe. Given that borrowers pay less than the full amount, filing a consumer proposal represents a form of debt relief. As a debt elimination strategy, a consumer proposal is a working solution for unsecured debts. You are an ideal candidate if you have a steady job and other income sources to repay some of your debts. Your total debt should be between $5,000 and $250,000. Debtors who want to avoid bankruptcy resort to this debt reduction strategy. Your creditors will agree to accept the proposal only if what you offer is more than what they will get were you to declare bankruptcy. For example, creditors will consider your proposal if you offer $35,000 while the equity in your house is only $25,000. Financial institutions will accept your proposal as they benefit more than if you go bankrupt. If you offer less than the equity in your house, banks would prefer that you file bankruptcy so that your house can be sold. Then, you are a good candidate for a consumer proposal if you have any of the following debts: personal loans, lines of credit, credit cards, and income taxes, which is money borrowed without offering collateral. Secured debt, borrowed on condition that you present collateral includes financial contracts, car leases and loans, and mortgages. You cannot include secured debt in a consumer proposal. One exception is if the amount borrowed is more than the value of the collateral. The right candidates for this debt reduction strategy are borrowers who want to keep their assets.

Moreover, creditors are not allowed to take legal action against the borrower, and wage garnishment is stopped. The borrower who files a proposal is not required to pay any fees. The proceeds from the proposal are used to pay to the proposal administrator. Interested in money? Learn more at this [http:/www.gettingcreditcard.net/requirements-to-qualify-for-a-secured-or-unsecured-credit-card.html guide].Thus, your creditors are the ones to pay the cost. Persons who have borrowed jointly with their spouse may file a joint proposal, including only non-mortgage debts in it. The amount of debt should not exceed $500,000. An alternative to a consumer proposal is getting a debt consolidation loan. At the same time, even if you have a well-paid job, having accumulated a high debt load may result in your application being rejected.

Finally, a good question to ask is who is not the right candidate? Persons who cannot afford to make payments may think of other solutions, including declaring bankruptcy. Just keep in mind that depending on your income, surplus income penalties may apply. You may also lose valuable assets such as your car, and the effect of bankruptcy on your credit rating will be more severe than if you were to file a consumer proposal.