The start of a new year offers a perfect opportunity to leave the past behind and begin anew. For many, this means making resolutions to get healthier, save more, or be more organized. But if you’ve been struggling with debt, the new year is also the perfect time to consider how to take control of your financial future and eliminate the financial burden that may have been weighing you down. One of the most effective ways to start fresh in the new year is through a Consumer Proposal , a debt solution that can help you regain control, eliminate stress, and get a fresh start financially.

What is a Consumer Proposal?

A Consumer Proposal is a formal, legally binding agreement between you and your creditors that allows you to reduce the total debt you owe and pay it back over a manageable period. Unlike bankruptcy, a Consumer Proposal allows you to retain your assets, such as your home or investments, while eliminating most of your unsecured debts, including credit card balances, personal loans, and payday loans.

When you file a Consumer Proposal, you propose a repayment plan to your creditors that offers an amount you can afford to pay, over a period of up to five years. Once your creditors accept the proposal, you no longer need to worry about making monthly payments to multiple creditors or dealing with collection calls. The debt is consolidated into one easy-to-manage payment.

The key advantage of a Consumer Proposal is that it freezes the interest rates and stops the collection activities. This means that you will no longer have to worry about interest charges that are adding to your debt or harassing calls from collection agencies. It’s a structured and practical way to regain control over your finances and make meaningful progress towards becoming debt-free.

How Does a Consumer Proposal Work?

Once you file a Consumer Proposal, the process begins. The proposal is reviewed by a Licensed Insolvency Trustee (LIT), a professional who is licensed by the Canadian government to assist people who are in financial trouble. The LIT works with you to create a repayment plan based on your income, expenses, and overall financial situation.

Once the proposal is agreed upon, your creditors are required to stop all collection activities, including lawsuits, phone calls, and wage garnishments. You only need to make one monthly payment to the Licensed Insolvency Trustee, who then distributes the payment among your creditors. The proposal will remain in effect until all agreed-upon payments are made, and once the proposal is complete, any remaining debt is wiped out.

Why Choose a Consumer Proposal Over Bankruptcy?

While bankruptcy is often seen as a last resort, a Consumer Proposal offers an alternative for individuals who need to reduce their debts but want to avoid the severe consequences of bankruptcy. There are several reasons why a Consumer Proposal may be the right solution for you:

·        You Get to Keep Your Assets:

Unlike bankruptcy, a Consumer Proposal allows you to keep your property, including your home, car, investments and personal belongings. This is one of the major benefits of a Consumer Proposal, as it allows you to protect your assets while still resolving your debt.

·         Interest Stops:

One of the most frustrating parts of carrying debt is the constant accumulation of interest. In many cases, high-interest rates, especially on credit cards, can make it seem like you’re never getting ahead. With a Consumer Proposal, once the agreement is in place, interest on the debt stops accruing. This gives you a clear path forward, without the fear of your debt spiraling out of control.

·        Consolidated Payments:

Instead of making payments to multiple creditors each month, you will only need to make one consolidated payment to the Licensed Insolvency Trustee. This simplifies your financial situation, making it easier to track and manage.

·        Legal Protection from Creditors:

Once you file a Consumer Proposal, creditors can no longer harass you with phone calls or collection actions. This legal protection offers peace of mind, knowing that you can work on your finances without the pressure of constant contact from creditors.

·        It Can Improve Your Credit:

Although a Consumer Proposal may impact your credit score initially, successfully completing the proposal demonstrates responsible financial behavior, which can help you rebuild your credit over time. Completing a Consumer Proposal can show potential lenders that you’ve taken the necessary steps to manage your debt and have learned how to handle finances responsibly. This can make it easier to obtain credit in the future, once your finances have recovered.

What Are the Requirements for a Consumer Proposal?

A Consumer Proposal is available to individuals who have debt under $250,000 (excluding mortgages of your primary residence). To qualify for a Consumer Proposal, you must demonstrate that you are unable to pay your debts in full but are willing and able to make reduced payments. Your Licensed Insolvency Trustee will work with you to determine the best solution based on your current financial situation.

If you’re unsure whether a Consumer Proposal is right for you, it’s essential to speak with a Licensed Insolvency Trustee who can assess your debt, income, and financial goals. They will help guide you through the process and provide tailored advice.

How to File a Consumer Proposal

To file a Consumer Proposal, you must work with a Licensed Insolvency Trustee (LIT). The LIT will assist you in filing the proposal, negotiating with your creditors, and creating a payment plan that works for your budget. The proposal will be presented to your creditors for approval, and if the majority of them agree to the terms, the proposal becomes legally binding.

Once the proposal is filed, the Licensed Insolvency Trustee will work with you to ensure that you make the agreed-upon payments. Your creditors will no longer contact you, and you can focus on paying down your debt in a way that works for your financial situation.

How MORATAYA Corp Can Help You

At MORATAYA Corp, we specialize in providing personalized debt relief solutions, including Consumer Proposals. Our Licensed Insolvency Trustees are here to guide you through the process, offering professional advice and creating a custom plan to help you regain control over your finances.

Starting the new year without the burden of debt is possible. With the right support, you can regain financial freedom and focus on building a secure future.

Ready to make a fresh start? Contact MORATAYA Corp today for a FREE consultation and find out how a Consumer Proposal can help you eliminate debt and start the year debt-free.