Reduce Credit Card Debt with a Consumer Proposal

Reduce Credit Card Debt with a Consumer Proposal

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Credit card debt is one of the most common forms of financial strain faced by individuals today. If you’re feeling overwhelmed by high-interest rates and mounting balances, you’re not alone. Fortunately, a consumer proposal can offer a lifeline, allowing you to significantly reduce the amount of debt you carry and regain financial stability. In this article, we explore how a consumer proposal can reduce credit card debt.

What is a Consumer Proposal?

A consumer proposal is a legally binding agreement between you and your creditors, facilitated by a Licensed Insolvency Trustee (LIT). It allows you to repay a portion of your debt over a period of up to five years, often reducing the total amount you owe by a substantial margin. Unlike bankruptcy, a consumer proposal lets you retain your assets while providing a manageable way to address your debts.

How Much Can Credit Card Debt Be Reduced?

The amount of debt reduction varies depending on your financial situation and negotiations with your creditors. However, it’s not uncommon to see credit card debt reduced by as much as 70-80%. Here are a few examples to illustrate the potential impact:

  • Example 1: If you have $50,000 in credit card debt, a consumer proposal might reduce this to $15,000, payable over a period of five years. This could lower your monthly payments to approximately $250, making it much more manageable than the original debt.
  • Example 2: For a debt of $30,000, a proposal could reduce it to $10,000, with monthly payments of around $167 over five years.

These examples highlight the significant relief a consumer proposal can provide, transforming an overwhelming debt load into a feasible repayment plan.

Find out how much we were able to save Nate & Shelley Sklar

Why Do Creditors Accept a Reduced Amount?

Creditors understand that recovering a portion of the debt is better than risking a complete loss if the debtor files for bankruptcy. A consumer proposal ensures they receive some repayment, albeit reduced, rather than potentially nothing. Additionally, creditors save on legal and administrative costs associated with pursuing debt collection through the courts.

Benefits of a Consumer Proposal

  • Avoid Bankruptcy: A consumer proposal offers an alternative to bankruptcy, helping you avoid its severe impact on your credit rating and future financial opportunities.
  • Retain Assets: Unlike bankruptcy, you can keep your assets, such as your home and car, while managing your debt.
  • Interest Freeze: Upon filing a consumer proposal, all interest charges on your debt stop, preventing further accumulation of financial burdens.
  • Affordable Payments: The repayment plan is based on your financial situation, ensuring payments are affordable and sustainable over the proposal period.
  • Legal Protection: Once the proposal is accepted, creditors are legally bound by its terms, and they cannot take further legal action against you.
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Steps to File a Consumer Proposal

  1. Consultation: Meet with a Licensed Insolvency Trustee to discuss your financial situation and explore your options.
  2. Proposal Preparation: Your trustee will help you prepare a proposal outlining the repayment terms to your creditors.
  3. Creditor Approval: Creditors will vote on the proposal. If the majority accept, it becomes legally binding for all.
  4. Repayment: Make the agreed-upon payments over the specified period, typically up to five years.
  5. Debt Discharge: Once all payments are made, any remaining unsecured debt included in the proposal is discharged.

Contact Us for More Information

If you’re struggling with credit card debt, a consumer proposal might be the solution you need. For personalized advice and assistance, contact David Sklar & Associates at 1-844-962-9200 or visit our website at www.davidsklar.com. Our team of Licensed Insolvency Trustees is here to help you navigate your financial challenges and find a path to debt relief.

For more detailed information, you can also check out these relevant articles:

By exploring your options and taking proactive steps, you can achieve financial freedom and peace of mind. Don’t let credit card debt control your life—reach out to us today!

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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Chan Abdulla
My visit at David Sklar & Association was great. I met Samycha and she was amazing and treated me with compassion and was never judge by anyone there at the office. I will recommend anyone that is looking for a new start in life again to book an appointment at David Sklar & Associate's. All the staff there is very polite and treat you like you are special.
Sheena
Extremely professional, empathetic, honest and down to earth.I felt as those I had previously known Samycha for years. Her ability to relate, understand and assist with my situation was comforting. Very happy with their services.
Simone Foster
The company as a whole is fantastic. If you’re not ready or serious they won’t harass you with cold calls but when you are ready they will help you with a realistic plan. Everyone I’ve worked with is efficient and knows what they’re doing. Just like everyone in the comments I have to praise Cori who I would describe to people like the auntie who knows best lol thank you for everything.
Ricardo Villa
Jerry Janiec and Hernee Templonuevo have been very helpful from beginning to end. Hernee is knowledgeable of what it is that is required of you regarding pertinent documents that they need. Jerry provides a clean picture of your options and makes recommendation that is suited with your current situation. Thank you, both.
Trish Gee
David Sklar & Associates… they work for you. They do everything they can to help you get out of debt. They lower your debt, then help you rebuild your credit. They care about helping Canadians get out of debt.I’m in a fair amount of debt, and they almost cut my debt in half for me, and in just five years, I will be debt-free, because of them. I’ve been sick because of the amount of debt looming over my head. After my first meeting with Grace, I feel so much better. Grace set up a Consumer Proposal to help me get out of my debt, and I can see an end to my debt. My mental health has gotten so much better since that first meeting, and I owe it all to Grace, and everyone at David Sklar & Associates. Thank you, all!
ronald hall
Trina was the one who handled my case. She was understand, patient and professional.
Chris B
Very professional and thorough
Miroslav Dobrilovic
Prompt and very professional responce,By my counsellor Jerry JaniecMake me belive, I'll be out of woods!
Godly Cruz
Cori was very helpful and kind. She thoroughly explained the process and guided me patiently all throughout. David Sklar & Associates is truly commendable.
Andy Bailey
It was a good experience with this company. I appreciate the time they took to help with my experience. Thank you very much and look forward to further business with you.
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