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If you live in Halifax and are considering filing for personal bankruptcy, you should first explore the other alternatives available to you. Bankruptcy is usually considered the last resort option.
Many people who find themselves with financial trouble use a consumer proposal to get back on track. Consumer proposals allow the individual in debt to pay back their creditors over a prolonged period of time. Proposals are ideal for those who have debts in excess of $500.
Consumer proposals offer many advantages including a maximum period of five years, frozen interest from the date of filing, possible negotiations to only pay back a fraction of the debt, creditors are stayed from pursuing legal action, and wage garnishments end.
First your trustee will help you determine how much you can afford to pay back each month by looking at your monthly income and expenses. Once an amount has been determined, it is up to your creditors to decide whether the proposal is acceptable. Under the Bankruptcy & Insolvency Act creditors have 45 days in which to do so.
If 50% or more of your creditors deem the proposal to be acceptable, it is considered acceptable by all. Your proposal will be approved 15 days later if there are no objections. However, if 25% or more do not believe your proposal is acceptable, you will need to attend a meeting of creditors where a suitable proposal can be arranged.
Throughout the course of the proposal you can miss up to two payments without penalty, and the payments will simply be added to the end of the proposal. Missing more than two payments will result in your proposal be annulled, interest charges will be added to all debts, and creditors can attempt to have your wages garnished.
A consumer proposal will also have an impact on your credit rating, as a note of the proposal will remain for up to seven years.
A consumer proposal is a great bankruptcy alternative, but it is not something that should be attempted alone. There are many things you will want to review with a licensed bankruptcy trustee before going ahead with the process. To find a licensed bankruptcy trustee near you, click here.
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