Reduce Your Debt And Protect Your Assets With A Consumer Proposal

When debt catches up with you, you might be inclined to panic. You can feel trapped, overwhelmed, or paralyzed by financial constraints. When wage garnishments affect your ability to balance your own budget and collection calls leave you sleepless at night, it’s hard to find a way out. We help clients who don’t know how to move forward with their financial future. One of the most common things we do is file Consumer Proposals in Ontario for our clients, and it might be the right path for you.

Pros and Cons of a Consumer Proposal

As Licensed Insolvency Trustees, at David Sklar & Associates we regularly find that a Consumer Proposal is the better way to help individuals get out of debt. While the pros outweigh the cons, no debt solution is perfect, and you should carefully consider Consumer Proposal pros and cons before talking to a Licensed Insolvency Trustee to file.

The pros of a Consumer Proposal include:

  • Reducing the amount of debt you have to pay back, and giving yourself up to 5 years to pay it back in affordable installments
  • Halting the accumulation of interest on your debt
  • Stable monthly payments that do not change over time, even if your income changes (unlike bankruptcy)
  • Putting a stop to wage garnishments and collection calls from your unsecured creditors
  • As long as you make your payments, you get to keep your assets
  • A smaller impact on your credit score, remaining on your credit history for only 3 years, as compared to the 7 years involved in a bankruptcy

The cons of a Consumer Proposal include:

  • Annulment if you miss 3 months of payments, though you can file for an amendment (before missing payments) if you no longer have the means to keep up
  • Your credit score is still affected
  • Limitation to unsecured debt only, meaning car loans and mortgages are outside of the Consumer Proposal

If you qualify for a Consumer Proposal, the pros outweigh the cons, and it compares favourably to bankruptcy and debt consolidation. Personal bankruptcy involves settling debts but losing non-exempt assets and it remains on your credit history for seven years after. Debt consolidation loans, meanwhile, can leave you paying more interest on a lump sum than you were paying before. The only time debt consolidation loans make sense are when the interest rate is lower than the combined interest of your unsecured debts; for example, if you can get a loan from a bank.

Should You Pay Your Consumer Proposal Off with a Loan?

That’s also the reason you should not try to pay off your Consumer Proposal immediately with the help of a loan. Sometimes our clients ask if it’s a good idea to pay it off right away by taking out a new loan; since your Consumer Proposal comes off your credit history within three years, doesn’t it make sense to pay it off as soon as possible? Most of the time, the answer we tell our clients at David Sklar & Associates is no. That’s because your interest stops accumulating with a Consumer Proposal, whereas any loan will need to be paid back with interest. You save money by staying patient and paying back your Consumer Proposal with time.

Working with us means far more than just filing a Consumer Proposal in Ontario. We can answer all your questions and give you advice about restoring your credit score. We also offer credit counselling at David Sklar & Associates so that you can learn how to avoid falling too far into debt in the future. If you’re in trouble with debt, give us a call.

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5.0
Based on 673 reviews
Jackie and the team at David Sklar and Associates took my very stressful situation and made me feel at ease. I was treated with respect and understanding from the start of my process right through to the end. Prompt email and phone responses made it feel like I was at the top of their priority list.Jackie and the team at David Sklar are the best in the business. I would highly recommend using their services.
Tree Broker
14:33 20 Jan 21
Has helped me put to gather all my financial debt and find a reasonable offer and deal in making payments towards all my debts as one. Has been patient and kind service one on one. A big thanks to Jackie for helping guide me through my process!
Jeremy Y
14:04 20 Jan 21
Jackie is an amazing person, she takes her time to make sure you understand everything. Every question I had she was always a email or text away with a quick response. Thank you again
WhoisDriaB
02:09 20 Jan 21
Jackie Stanley was amazing she was kind and wonderful to work with i am so grateful for her help she set down went over all my questions and my situation and i got all the help i need it
danny adlabi
20:11 19 Jan 21
Jackie made me feel very comfortable from the minute I walked in. She treated me with humanity and respect. She is also very professional and knowledgeable; she explained very clearly what was involved. Thank you Jackie for giving me the chance to start anew.
mer irf
19:59 19 Jan 21
We were so tired of our debt holding us back. We reached out to Jackie at David Sklar and she was so great from day one! She was quick understanding caring! Our experience was excellent! Everything was smooth and easy. What a relief it was with Jackie at David Sklar!Thank You so much 😊
Dorianne White
15:06 19 Jan 21
Best thing I ever did! Don't let the messaging out there convince you being unable to manage your debt is shameful and a failing. Cori is amazing! She knows what she's talking about and she will guide through all your options. Everyone I've dealt with at David Sklar has been respectful and friendly. This was life changing help for me.
F Volpe
05:07 11 Jan 21
Cori, she’s very helpful and patient. She treated me with respect. She took so much time to explain to me what’s the best way to resolve my financial problem and teach me how i can save to avoid thesame problem again. Cori thank you so much.
Maria G.
19:07 03 Jan 21
I highly recommend David Sklar & Associates, especially Rhoda Lewis, she listened with patience, understood my whole situation, advised professionally, she has many years of experience and is very knowledgeable, I felt confident with her work, she handled my case and guided me every step of the way, she reviewed with me in detail, and is very caring. I really trust David Sklar’s team, they really work and help people in a very simple and professional way. I am so grateful for Rhoda’s work helping me through this situation. Now it is like I received a 2nd chance to live free, I can take control and now take care of other things that matter in my life. Thanks for taking away the stress & weight I was carrying on my shoulders. I can now sleep at night. God Bless you for all your work. Thank you.
Nilda H.
23:34 21 Dec 20
The staff at David Sklar are professional, respectful and honest right from my first phone call. It made a really embarrassing and difficult situation easier to handle. Now I'm on the way to rebuilding my life for my family.Thank you to the team and especially Ashley from the Brampton location.
J H
21:14 12 Dec 20