Are you afraid of insolvency? If so, don’t worry! You may be able to get your debt under control and improve financial wellness with a consumer proposal. On today’s post we’ve invited our friends at Bromwich+Smith who specialize in this area for an introduction on what consumer proposals do as well as some benefits about going down that route

Considering bankruptcy? A consumer proposal may be a better option

Financial trouble isn’t something that most people expect. After all, people generally follow the same trajectory in life: get a job and make money to be able to provide the life you want for you and your family. While nobody plans to have money troubles, life happens. There are many circumstances you may find yourself in that are out of your control, like job loss or loss of income, injury and illness. We know that seven out of 10 situations that cause financial trouble are unforeseen and often not planned for. So what can you do to overcome financial stress when you’re in over your head?

Another way to start again

Bankruptcy is the number one way to get rid of debt when it becomes insurmountable. But, bankruptcy isn’t the only option – and sometimes, it’s not the best option. While bankruptcy can eliminate debt and give you a fresh start, it has a negative impact on credit rating, can delay your ability to obtain future credit, may require potential surrendering of assets, and more. So how can you avoid bankruptcy to eliminate debt?

Why consumer proposals may work for you?

A consumer proposal is an alternative solution to avoid declaring bankruptcy. It involves renegotiating what you owe to your creditors, handled by Licensed Insolvency Trustees on your behalf. Think of it as a single negotiated settlement between you and your creditors on terms you both agree on. All creditor action including collection calls and interest charges are stopped, giving you immediate peace of mind again. You pay what you can afford in monthly payments with up to five years to pay, instead of what your creditors were demanding. This locked in amount allows you to know exactly what is owed so you can make manageable payments and get on with your life. Consumer proposals can only be obtained through the help of a Federally Licenced Insolvency Trustee like Bromwich+Smith, and this service is paid by a government tariff. They remain on your credit for three years after you complete your proposal, instead of the six years that comes with a completed bankruptcy, and there are many ways to rebuild your credit through this process.

What to expect with a proposal?

The process starts with a free consultation to establish the details of your current financial situation in order to work within your budget to determine the terms of the proposal. Once terms are accepted by you and the proposal is submitted, relief is in sight. Creditors will then vote to accept the current terms or amend the proposal to terms that are satisfactory to the majority. As long as a proposal offers your creditors more than they would receive in a bankruptcy, they are usually accepted.

How to know if a proposal is right for you

If you can identify with any of the following, a consumer proposal might make sense. You:

  • Have experienced a loss of income due to job loss, sickness or injury
  • Are only able to make minimum payments or unable to make any payments
  • Have maxed out your borrow-potential and can’t get more credit
  • Rely on credit for everyday expenses
  • Can’t afford interest payments

While all cases are unique, a debt relief specialist can assess your financial situation over a confidential, non-judgmental and unbiased no obligation free consultation to recommended which debt relief solution may be best for your unique situation.

Ask us your questions or book your consultation today:

We’ll find the right solution for you and get you back on track to rebuilding your worth.

By Taz Rajan Community Engagement Partner at Bromwich+Smith

Taz has been in the finance industry for nearly 2 decades and has always been passionate about education and empowerment.  Having declared bankruptcy herself, she intimately understands the shame, stigma surrounding matters of debt as well as the joy and relief that comes from restructuring.  Taz actively works to normalize the conversation of debt through blogs, media interviews, webinars, lunch & learns and through building relationships.