5 Reasons To File A Consumer Proposal

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Compound maxed-out credit cards with other debt like student loans, personal loans, lines of credit, or payday loans, and you can quickly find yourself drowning in high-interest charges, late penalties, collection calls, and worse. 

If you can’t make headway on your debt or meet minimum payments, you will want to speak to a financial professional like a Licensed Insolvency Trustee.

The Licensed Insolvency Trustees at David Sklar & Associates will walk you through all of your debt relief options and help you identify the right one for you. After all, there are more debt relief options than just bankruptcy — and bankruptcy should be your last choice.

For one, consumer proposals are a useful debt relief tool that allows you to get out of debt in Ontario without having any of your assets seized. However, they can take time to get out of and require you to make consistent monthly payments. The Licensed Trustees at David Sklar & Associates specialize in consumer proposal services in Ontario and guide you through the process. 

There is no one-size-fits-all debt relief solution, but consumer proposals make the most sense in many cases. There are various reasons to choose a consumer proposal as your debt relief solution:

#1 You Are Insolvent

A person is insolvent when their liabilities exceed their assets. In practice, if your income allows you to make your debt payments on time, this is not an issue. When you can no longer afford to make debt payments, insolvency could force you into bankruptcy or a consumer proposal.

A bankruptcy trustee, now known as a Licensed Insolvency Trustee, will help you confirm whether you’re insolvent or not. Book a first-time free consultation with David Sklar & Associates to find out about your eligibility.

#2 You Have Significant Investments Outside Of An RSSP

Your RRSP investments are all protected from bankruptcy, except for contributions made within the 12 months before you filed for bankruptcy. That said, not all investments are made through an RRSP. If you have any investments outside your RRSP, such as property, stocks, bonds, gold, cryptocurrencies, art, or other assets, a consumer proposal will protect them.

#3 You Have Equity In Your Home

Whether or not your home is at risk when in bankruptcy depends on the equity you have in your home. The majority of Ontarians who declare bankruptcy own a house with a mortgage. 

In Ontario, your principal residence is exempt from bankruptcy proceedings if your equity does not exceed $10,000. If your equity exceeds $10,000, you may lose your home or have to pay the equity to keep your home. 

A consumer proposal is a much better idea than bankruptcy in this scenario, as your home will not be affected. You can calculate your home equity by subtracting your mortgage and any property taxes due to your home’s value. David Sklar & Associates can help you evaluate your principal residence’s risks and how bankruptcy could affect your home.

#4 It Stays On Your Credit Report For A Shorter Time

You may have heard that one of the benefits of bankruptcy vs a consumer proposal is that a bankruptcy will disappear from your credit rating faster. The thing is, this only rings true if it’s your first time filing. A consumer proposal can last up to 5 years and is only removed from your credit report 3 years after completion. A bankruptcy, if it’s your first time filing, will be removed 6 years after you complete the process. That said, the more you file for bankruptcy, the longer it will be on your credit report.

#5 To Protect Your Assets From Creditors

The most significant difference between a consumer proposal and filing for bankruptcy is how your assets get handled. Bankruptcy will require you to sell a wide range of assets to meet your debt obligations. These assets must be assigned to your bankruptcy trustee, who will then sell them and disburse the proceeds to your creditors. 

If you don’t want the assets to be sold, you may be able to pay to cover the equity, allowing you to keep assets such as your home. Assets you might need to part with include investments, property, RRSP contributions made in the last 12 months, and inheritances.

A consumer proposal takes longer because you will have to repay your debts in monthly payments for a period of up to 5 years, but you will get to keep your assets. It’s a long process, and you will have to budget accordingly to meet your debt payments, but it keeps your assets intact.

If you’ve already spent years building financial wealth through assets like investments and property, a consumer proposal is a safer way to get out of debt. Don’t let credit card companies take what you’ve worked so hard to build. Find a compromise with a consumer proposal.

File A Consumer Proposal With David Sklar & Associates

As bankruptcy trustees, we offer consumer proposal services and bankruptcy services to those who need debt relief. After all, a consumer proposal is more than just a new agreement with your creditors. It also provides real relief like debt reduction and ending interest accumulation on your existing debt.

Other debt reduction schemes may sound appealing, but the Financial Consumer Agency of Canada warns that some consumers may wind up in even worse financial shape. Remember that other debt reduction pitches are financial products meant to make the company money. When a company offers you a debt reduction plan, compare their interest rates to your current rates and do your research into late payment penalties.

There are various reasons to file a consumer proposal. In a consumer proposal, your debt is reduced, and interest stops altogether. Consequently, your consumer proposal will appear on your credit history for three years after you complete it. That means it can be on your credit history for up to eight years, but if you’re struggling to keep up with payments now, you’re in no position to borrow more money. Get out of debt and rebuild your credit score.

If you’re interested in finding real debt relief, book a consultation with David Sklar & Associates to discuss your options. Real debt relief is around the corner.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt, call us at 1-844-962-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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Jerry was professional and was easy to deal with
Debbie Asquith
00:09 29 Nov 22
I was quite nervous and a little embarrassed that I needed financial advice. I met with Jerry Janiec and he was very helpful. He made me feel comfortable and explained everything in easy to understand terms so that I understood what my options were. I would recommend David Sklar & Associates for anyone in my position.
Melissa Blackburn
19:53 17 Nov 22
I was fortunate enough to be referred to David Sklar & Associates Inc. by a family member. Now in the10th month of a Consumer Proposal process, I am very impressed with the organization, professionalism and impeccable customer representation that I have experienced. To this effect, I amparticularly thankful to Jerry Janiec and Rhoda Lewis for their excellent work.
Suzanna Vaclavik
12:21 16 Nov 22
Recently dealt with Christine at David Sklar & Assoc. and worked out a Consumer Proposal to put forth to my creditors for my Credit Card debt. She was very courteous, professional and put me at ease with a proposal that I can afford on a monthly basis, which will eliminate my debit in a reasonable timeframe. I would recommend Christine and this firm in a heartbeat. Very happy with the service and attention I got !!
Patrick Kovanchak
01:59 15 Nov 22
Excellent customer service. Special thanks to Olga for being prompt and helpful. She’s a star. Bibi is helpful as well. Great agency to work with.
Fady Tadros
19:28 14 Nov 22
After seeing your commercial play on CP24, I realized that it addressed all the questions and concerns I had about my financial situation. It all started with my one phone call to your office. I had the extreme pleasure of working with Cori Naron at your St. Clair West office in September 2022. She took the time to explain what my options were knowing that it was a very stressful situation with my debt load. She made me feel at ease with my decision to file a consumer proposal and outlined the benefits to me. She is thorough and her attention to detail is outstanding. While it takes a little while to reap the benefits of making this hard decision, she took the time to reassure me that it was in my best financial interest. Well done David Sklar & Associates for having such an amazing representative at your company and for allowing me to "get a fresh start"!
David
14:31 14 Nov 22
Very highly perfection individual, well executed and greatly knowledgeable in his work, which guided me me the right decisions making opportunities. Thank you.Sincerely, Peter Romasz
Peter Romasz
20:18 13 Nov 22
Trina Powell was very helpful and made the process very easy. Thanks again for all your help.
Jennifer Hager
17:59 06 Nov 22
Jerry is a caring, trustful, knowledgeable and competent Sklar associate. He understood my needs and quickly went to work on my behalf. Ever indebted to David Sklar and Associates and especially to Jerry for his professionalism and caring approach.
David Craig
19:31 31 Oct 22
Jerry Janiec is very knowledgeable and very helpful everything he explained to me was straightforward and very easy to understand. I'm very pleased to be working with Jerry to become debt free. I will definitely be recommending to any friends or colleagues your services.Thank you again for helping me get on the road to be debt free. 5 Stars is well deserved.
Christopher Rakobowchuk
17:41 27 Oct 22
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