Wednesday, September 24, 2014

Why A Consumer Proposal Is Better Than Bankruptcy

By Karina Frost


There are number of people who are already buried in debts and are unable to pay them. These people are those whose income are not able to keep up with the interest of their debts and such. When they cannot afford a standard quality living anymore, they can file for bankruptcy. However, there are pros and cons to this option that one has to think of.

To those who think that the disadvantages of declaring personal bankruptcy is too much for them, then they should consider looking for an alternative that they can use. Out of the many alternatives that they can use, they should consider using the consumer proposal Toronto. This is an arrangement negotiated with creditors through an administrator.

This is a legally binding agreement between the debtor and creditor. This is basically put in place so that you are provided with an immediate protection from the debt collectors. The said agreement will also be your last choice to make arrangements for the partial repayment of all of your total unsecured debt owing.

In filing the said agreement, you can expect any wage garnishments to cease immediately. Accumulating interests will also stop right from the filing date of this agreement. More than that, you can expect the calls from collection agencies to stop right from that date. Remember that this is in accordance with the law.

This option is definitely better than bankruptcy. Unlike in bankruptcy, you do not need to worry on liquidating all of your possessions just so you can pay your debtors even a portion of your debt. When it comes to this arrangement, you do not need to worry about paying the debts by selling your assets like your house or car.

There is also no need for you to worry too much about your credit score. Unlike when you declare bankruptcy, the negative impact that is put in place on your credit score will not be generally severe. When you go for this agreement, the credit score will get an R7 rating, as opposed to the R9 rating of bankruptcy. R9 is the lowest rating.

You will also find this agreement to be helpful to getting back your self-esteem. Unlike bankruptcy, you will still have the chance to pay off even a portion of your debt even when you file this arrangement. You can then regain that lost sense of control when you opt for the said arrangement instead of bankruptcy.

Your creditors can also take advantage of this agreement. When they accept your agreement, they are still assured that you will pay for your debt. Unlike in bankruptcy where there is a chance that they receive nothing at all from the debtor, the said agreement is much acceptable to them. They will prefer this agreement because they are sure to receive something from you.

If you opt to go for this agreement, you should know what qualifications are in place for it. This is so that you can make sure that you qualify for the said agreement. It is a must that you qualify for the said agreement. If you do not qualify for it, then you have no other choice but to look for another option that will allow you to get out of your debts.




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