The Advantages of a Consumer Proposal for Debt Relief

If you are unable to make ends meet and your debt is growing out of control, you must look into your options for getting back on your feet. A consumer proposal might be the solution if you have already tried budgeting and credit counseling. As an alternative to bankruptcy, consumer proposals are commonly sought by financially troubled individuals.

The proposal constitutes a binding agreement between the debtor and the creditors to address the debts. In the proposal, creditors are given a lower amount instead of the total amount owed.

Positive Effects of Getting a Consumer Proposal

It’s easy to feel hopeless when you are drowning in debt. However, a consumer proposal is an alternative to consider. Thousands of individuals have filed consumer proposals as a means of debt relief. An insolvency trustee from companies like Golding & Associates Limited can help you reach a deal with your creditors using a consumer proposal.

Therefore, you can discuss reduced settlements on your unsecured financial debts. People frequently pick this option over filing for bankruptcy so they can retain some of their possessions.

Pay off Debts

Unlike bankruptcy, the primary objective of a consumer proposal is to help people pay off their debts rather than discharge them. Reduced month-to-month payments are one of the most notable advantages of a consumer proposal. You and a licensed insolvency trustee will work out a manageable monthly payment plan.

If your proposal is approved, you will end up making one monthly payment to the trustee in place of the settlements you would typically make to your creditors. Your trustee will then give their share to your lenders.

Avoid Bankruptcy

Filing bankruptcy is commonly viewed as a last resort when other debt-relief choices have been exhausted. Some debtors may benefit from a bankruptcy solution, but they should weigh their options before deciding.

In contrast to bankruptcy, in which you are obligated to give up all of your non-exempt possessions, a consumer proposal enables you to keep everything you own. Some people may lose their work if they declare bankruptcy, so a consumer proposal is beneficial.

Collection Calls End

The constant harassment of debt collectors can be too much to handle when you’re already behind on payments and have no idea how to catch up. The only two solutions to legally prevent creditors from calling you are to declare bankruptcy or to file a consumer proposal in Nova Scotia.

As soon as you submit a consumer proposal, the trustee will inform the debtor’s creditors. By law, they are mandated to stop their collection activity. Communication can take many forms, like letters, phone calls, and wage garnishment. Lots of people will find this to be a huge weight off their shoulders.

Improve Financial Management Skills

A consumer proposal often consists of credit counseling as a necessary service. Your trustee will talk about how your debt grew out of hand and provide guidance on how to avoid similar situations in the future. Financial topics include budgeting, saving, investing, and making the most of your credit.


When you take a closer look, you’ll realize that a consumer proposal truly brings many perks to the table, even though it might not initially sound like a very appealing process to experience. If you are in a tough situation and do not know what to do, consider giving some thought to making this step toward reducing your debt and regaining financial stability.