Filing bankruptcy can be messy, expensive and embarrassing. No one enjoys having to explain in court why they feel unable to pay back creditors. A great alternative solution allowed by bankruptcy law is a consumer proposal.
What Is a Consumer Proposal?
A consumer proposal is an offer of agreement to pay creditors a portion of what is owed, with the benefit of having them forgive the remaining balance. It is a legal agreement when both parties sign to the terms of the repayment obligation. It is a preferred way to resolve long-standing debt issues for both sides. The creditor will not have to take a complete loss and the individual in debt can improve the future financial outlook.
A Workable Alternative to Filing Bankruptcy
The Bankruptcy and Insolvency Act allows for an option that is an alternative to bankruptcy case filings in court. The overseer of the entire process is a bankruptcy trustee. They are knowledgeable about all of the laws and how to get you the most affordable agreements possible. The creditors are in no way obligated to agree to your proposal, but many will to avoid having to write the debt off completely.
Improving Your Credit Rating
Loans and lines of credit have to handled with care to avoid negative marks on your credit rating. Slow payment and a history of non-payment put hard hits on your credit score. Offering a proposal and sticking with it is one way to start improving your credit score fairly quickly. One of the most important things to remember is to pay the agreed upon amount as it is due, or early. Keep up with all of your other debt obligations and the score will begin to move up.
Developing Responsible Credit Habits
Changing the bad debt management habits that landed you in a tough position are an essential part of the overall debt relief process. Limiting the number of credit applications, reducing the amount owed on each card and paying at least the minimum amounts each month will keep high interest from skyrocketing your debt totals.
Lifting the Burdens of Overwhelming Debt
The feeling of freedom from overwhelming amounts of debt can be uplifting and encouraging. Nearly everyone has made a share of bad credit and debt management decisions. There are ways to avoid the hassles and scourge of bankruptcy and get debt-free. There is a little paperwork involved,negotiating for the best terms on both sides, but ultimately both end up walking away a winner.
Contact bankruptcy specialists to find out about this effective alternative to bankruptcy today!