A Licensed Insolvency Trustee (LIT) oversees a consumer proposal, a formal, legally enforceable procedure. Toronto’s consumer proposals could be the answer for you if you are drowning in debt and cannot figure it out. Through a legal route called a consumer proposal, you can bargain with your creditors to devise a repayment plan that syncs with your financial situation.
The LIT will create a “proposal” throughout this process, which is an offer to pay your creditors a part of what is owed to them, extend the time you have to pay off the debts or do both. Here is how to get started with a consumer proposal Toronto.
Schedule a consultation with a LIT.
The Superintendent of Bankruptcy in Canada regulates all components of consumer proposals, including licenses, filings, and fees. As a result, the process is quite transparent.
An authorized debt assistance professional will attentively listen as you describe your financial status, including how much money you make, what you own, how much you spend each month, and how much debt you currently carry.
Try to find out more about all the debt relief options you have. To assist you in selecting the best choice for your unique needs, a Licensed Insolvency Trustee will go over your available options. You might now decide that submitting a consumer proposal is the best action for you and your family.
Prepare and file a consumer proposal
If you opt to file a consumer proposal, your LIT will assist you in creating a proposal for your creditors. The proposal will include information about how much debt you plan to pay off, how much you’ll pay monthly, and how many months you’ll make payments.
In addition to filing your consumer proposal with the court, your LIT will also notify each of your creditors. You are not obligated to make any payments for the 45 days that your creditors have to review the proposal. The process shields you from legal action, such as wage garnishment, and interest on your obligations will cease collecting.
Creditors accept the consumer proposal.
The court will approve the consumer proposal and make it legally enforceable on all of your creditors after a 51% majority of your creditors accept it (or if no opposition is received within 15 days). Your monthly payments begin as soon as the proposal is accepted.
Pay off your LIT.
After that, you will make one equal monthly payment to your LIT (no more than five years) for the duration specified in the plan. Contrary to many other “debt plans” you may have heard of, you won’t be required to pay any extra fees or service charges.
Attend two sessions of credit counseling.
You must attend two credit counseling sessions to have your debt forgiven through a consumer proposal. These sessions will teach you how to set up a budget and manage your money. Your Licensed Insolvency Trustee will file the proper papers to release you from debt once you have complied with the conditions of your consumer proposal and completed all of your required monthly payments.