Can You Qualify for a Consumer Proposal in Windsor? Insights from Andrea Orr on Your Options

If you are grappling with debt and yearning for a path to financial stability, a consumer proposal could be the beacon of hope you seek.

But how do you know if you qualify?

What are the potential risks?

Andrea Orr, a seasoned Licensed Insolvency Trustee (LIT), shares her wealth of knowledge to illuminate your options and the steps to consider when exploring a consumer proposal in Windsor.

What Is a Consumer Proposal?

A consumer proposal is a legally binding agreement between you and your creditors, administered by a Licensed Insolvency Trustee (LIT). This arrangement allows you to settle your debts for less than you owe by making structured payments over a set period, typically up to five years.

Unlike bankruptcy, a consumer proposal enables you to keep your assets while reducing your overall debt, making it a viable alternative for many Canadians.

Do You Qualify for a Consumer Proposal?

To be eligible, you must meet the following criteria:

  • Debt Between $1,000 and $250,000: Your total unsecured debts (excluding a mortgage on your principal residence) must fall within this range.
  • Unable to Repay Full Debts: You need to demonstrate financial hardship that prevents you from paying your debts in full.
  • Steady Income or Ability to Make Payments: You must have a source of income or financial resources to make regular payments under the proposal.

If your debts exceed $250,000, you may still qualify for a Division I Proposal, a similar solution for individuals with higher liabilities.

The Consumer Proposal Process: Step by Step

Consultation with a Licensed Insolvency Trustee (LIT)

 Andrea Orr will review your financial situation and advise whether a consumer proposal is the right option.

Proposal Submission

Your LIT will negotiate with your creditors and offer a repayment plan based on your affordability.

Creditor Approval

Creditors holding at least 50% of your debt must agree to the terms. Once accepted, all creditors are bound by the proposal.

Debt Repayment Begins

You’ll make fixed monthly payments for up to five years without additional interest charges.

Debt Clearance Upon Completion

Your remaining eligible debts are legally discharged after successfully making all agreed payments.

Risks and Considerations

While a consumer proposal offers many benefits, it’s essential to consider the potential drawbacks:

Impact on Credit Score:

A consumer proposal remains on your credit report for three years after completion, which may affect your ability to obtain credit. However, it’s important to note that a consumer proposal can be a step towards rebuilding your credit, as it allows you to manage your debt in a structured way.  It’s also important to note that it is common to include a clause in the proposal that allows you to pay it off sooner if you are able to – the term of the proposal can be reduced.

Creditor Rejection:

If creditors reject the proposal, adjustments may be required, or you may need to explore other debt-relief options. However, with the guidance of a Licensed Insolvency Trustee like Andrea Orr, you can often negotiate a revised proposal that is acceptable to your creditors.

Strict Payment Schedule:

Missing payments can void the proposal, again leaving you responsible for the entire debt amount.

With Andrea Orr’s guidance, you can navigate these challenges and determine whether a consumer proposal is the right fit for your financial situation, feeling supported and reassured every step of the way.

Why Work with Andrea Orr?

Andrea Orr is a trusted Licensed Insolvency Trustee in Windsor. She is dedicated to helping individuals and families achieve financial freedom. With over 30 years of experience in debt relief solutions, she provides personalized guidance and ensures you understand all available options, empowering you to make informed decisions about your financial future.

Don’t navigate the process alone if you are considering a consumer proposal. Visit AndreaOrr.com today to schedule a free consultation and take the first step toward financial relief.