A consumer proposal NOT bankruptcy. A consumer proposal is an alternative to bankruptcy. In a consumer proposal a deal is made with the people you owe money to (your creditors).

A consumer proposal is typically filed by someone who has more debts than they can handle on their own, but they have enough income to make at least some payments each month.

Here’s an example:

You live in Brantford, Ontario (because your rent is relatively inexpensive) but you work in Mississauga (because you were able to find a job paying more than you could find in Brantford).

You were in good shape financially, but then you were laid off for a few months, and you got behind on your bills. Then your car broke down, and the repair bills put you even farther behind. You are back to work now, but the increasing cost of gas is making it very difficult to get caught up.

You don’t want to go bankrupt. You have a good job, and you could afford to pay $300 per month towards you debts. Unfortunately your creditors want $800 per month, and you just can’t afford it.

The solution may be to file a consumer proposal. It may be possible to file a consumer proposal where you offer to make payments of $300 per month for the next three to five years. You make the payments to the administrator of the proposal (a firm such as Hoyes, Michalos & Associates Inc., the sponsor of this web site), and the administrator distributes to each creditor their share of the $300 monthly payment.

The concept behind a consumer proposal is that it is a good deal for everyone. It’s a good deal for you, because you are now making one monthly payment that you can afford, and you are avoiding bankruptcy. It’s a good deal for the creditors, because even though they may not receive the full amount they are owed, they are receiving more than if you filed for bankruptcy.

Over the last few years our sponsor, Hoyes Michalos & Associates Inc, has filed more consumer proposals for residents of Brantford than any other firm in Brantford. However, a consumer proposal is not the correct option for everyone.

To file a successful consumer proposal you must have the income to make the payments each month. If your job status is uncertain, or if your income fluctuates significantly from month to month, a proposal may not be the correct option.

However, for many residents of Brantford, a consumer proposal is a great option. In fact, if you own a home in Brantford, a consumer proposal may be a much better option than bankruptcy, because in a proposal you keep making your mortgage payments, and you keep your house.

Each situation is different, so please call us in Brantford at (519) 770-4440 to make an appointment with us to review your situation, and help you develop a plan to deal with your debts, or e-mail us if you have any questions.

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