A consumer proposal will be helpful in settling a person’s unsecured debts with creditors. When a proposal is made, the settlement can take up to 60 months. You can read more on the facts on why you should make use of consumer proposals in the below article. You can find lawyers based on your legal issue in http://blogs.findlaw.com/ , and you can further learn about the latest legal news.
The replacement for bankruptcy is consumer proposal to get rid of debts. You can pay as low as $200 to avoid a debt of $30000 with the help of proposal.
As a first step, you should meet a licensed trustee who will check your financial status and guide you through the options. A consumer proposal can be filed only with the trustee, as it is a formal method of filing through Bankruptcy and Insolvency Act. The trustee through the federal government to give your protection legally from creditors and get proceedings stay will register when you opt for consumer proposal the proposal.
As a next step, you should work with the trustee to get the needed documents ready for your proposal. You should provide the needed documents like income, assets, debts so the trustee can put forth a proposal to match your financial situation. You should also provide a list of unsecured debts, which includes joint debts, as the reason behind consumer proposal is to offer a reasonable settlement amount to the creditors. There is no way to exclude the unsecured dents.
When the proposal is sent to the creditor, you will have 45 days time to check the proposal from the date of filing. The creditor to accept the claim confirming the amount owed and whether they accept or deny the offer can use the time frame. One vote equals a dollar so you should aim for the majority votes accepting the proposal. When the 45days time frame is done, your trustee will go ahead and do a countdown of votes.
Once the votes are checked, there is a possibility of three things to happen. One is the acceptance of the proposal, second is the rejection of the proposal, or there is a possibility of your creditors to ask for more money by doing a counteroffer. The company will check the number of creditors who accept the counteroffer. If it is more, then your trustee will do a negotiation and come to an agreement, which will work out for both the creditors and you.
Based on the terms agreed the proposal payments would be made. The funds will then be collected, deposited in an account and the funds will be distributed periodically to the creditors. In the meantime, if you are in a position to pay off the proposal you can do that anytime. The repayment terms don’t include any interest accrues on the remaining balance. From the accumulated payments from the trust account, the fees owed by the trustee will be paid. Other than the payments negotiated to the creditors there are no extra hidden fees to be paid.