What is a consumer proposal
A consumer proposal is a negotiated settlement between you and your creditors, arranged through a Licensed Insolvency Trustee (LIT). You agree to pay a portion of your debts, freeze interest, and protect your assets (like your home or car) while getting relief from collection actions.

What Debts Can Be Included
A consumer proposal can include various types of debt, such as credit cards, personal loans, and lines of credit, as well as payday loans and tax debts owed to the Canada Revenue Agency (CRA). Student loans can also be included if they are more than seven years old. Secured debts like mortgages or car loans are not included. You must continue paying those directly if you want to keep the asset.

Drawbacks
A consumer proposal can affect your credit rating for up to seven years, during which all payments must be made on time to maintain compliance. It may also make it more difficult to secure future loans, such as car financing or mortgages, which could come with higher interest rates. Additionally, all creditors involved must approve the proposal before it can take effect.

Final thoughts
Ask yourself, “Is your home equity truly working for you?”. Forward this newsletter If you, or someone you know is struggling with debt or high interest rates. Reach out, you don’t have to face it alone, there are options available. I’m offering a free consultation for first time clients.