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When you have a lot of debt, it can be hard to manage and even harder to get rid of, particularly when it’s high-interest consumer debt. Although some borrowers in Fredericton can deal with their debts using just their income, others will struggle with it for a long time and may eventually need a more serious solution.
Filing for a consumer proposal in Fredericton involves a legally binding procedure that becomes a matter of public record under Canada’s Bankruptcy and Insolvency Act. Essentially, this procedure is meant to significantly reduce the amount of debt you have and allow you to pay back a large portion of what you owe. The amount you’ll actually end up owing will mainly be based on your income, savings, and the properties you own. If the proposal is filed without incident, you should ideally be able to pay back your remaining balance through a series of monthly installments.
Wondering if your creditors will accept your consumer proposal? Click here.
In Fredericton, a consumer proposal might be necessary under various circumstances, such as when:
Since a consumer proposal is a legally binding process in n Fredericton, it can only be administered by a Licensed Insolvency Trustee; a court-appointed employee regulated by a branch of the federal government known as the Office of the Superintendent of Bankruptcy Canada. Finding one of these trustees is the first step you’ll need to take to properly file for a consumer proposal.
Afterward, the procedure is pretty straight forward. Here’s a quick layout:
Want to know how you can pay your consumer proposal early? Find out here.
As we mentioned earlier, only your unsecured consumer debts are eligible for the consumer proposal process in Fredericton. This refers to any kind of debt that is not collateralized, which happens when you offer your house, car, or another asset as security for a loan or other large-scale credit product. Certain forms of government and legal debt also won’t be eligible. We’ve listed a few examples below.
Click here to know if you can get approved for a loan while in a consumer proposal.
One of the main reasons why a consumer proposal must be carefully considered is that the process can have a significant negative impact on your credit rating and credit report.
That said, while the negative effect of a consumer proposal can be profound, that notion alone should not deter you from the process. Remember, if you remain in debt, the same (or even a worse) effect may occur. It’s far better to reduce your debts and deal with the consequences quickly, rather than waiting until the situation declines further.
Want to learn more about how credit scores are calculated? Click here.
Although both solutions involve a similar legal procedure, bankruptcy can have a far worse and longer lasting negative impact on your finances. Below, we’ve included a few of the major similarities and differences between the two procedures so you’ll know what we mean.
Declaring bankruptcy for a second time? Here’s what it might cost you.
If you’re currently struggling with your debt load and are interested in how a consumer proposal can help you, Loans Canada can match you with the best service provider in Fredericton.
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