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Proposals the # 1 debt solution

August 20, 2020

Proposals took over from bankruptcies several years ago as the # 1 debt solution for Canadians and for good reasons.

  • Proposals don’t linger on credit reports as long as bankruptcies.
  • Proposals are not bankruptcies – when asked on job applications if you have ever filed a bankruptcy you can answer “NO”.
  • Proposals impose less oversight on debtors than bankruptcies. 
  • Second time bankruptcy filings add longer administrative requirements, are reported for longer on credit reports and are more costly to administer than first time filings. 
  • Multiple proposal filings have fewer negative implications.

Proposals can be very creative. 

  • Proposals can be based on future events – “the debtor will pay out the proposal in full upon sale of real property in two years from now” or “the debtor will be able to withdraw funds upon maturity of an investment to pay out the proposal”. 
  • Proposals can have step up or even step-down payments “during seasonal periods of unemployment the debtor’s payment will decreased by $XYZ per month”. 
  • Third party funds can help with negotiations – “the debtor’s father agrees to make $YXZ available in one lump sum payment, available upon acceptance of the proposal by the creditors”. 
  • Payments may be multi-sourced – “the debtor will make monthly payments of $YZX and will also make periodic payments of $XZY as investments mature”.  
  • Another form of proposal is a percentage of income, usually in the case of businesses or commissions – “the debtor will pay X% of business income” or “the debtor will pay Y% of commissions”.  
  • Periodic or even irregular payments are also a possibility and can be negotiated into the proposal terms.  For instance, “the debtor will make payments every four months in the amount of $YZX”.

Call us to explore the possibilities for developing a proposal that is specifically crafted to suit your circumstances and help get you out of debt. 

Call 519-646-2222 for your free no obligation consultation.