Nunavut Consumer Proposal
Historically, Canadians have not shown the same proclivity to spend more than what they earn as their neighbors to the south. Recent trends, however, suggest that things might be changing. In January 2013, a noted bankruptcy firm released a survey that indicated some potentially alarming statistics. During 2012, Canadian household debt increased by just under 165 percent, reaching a level that is similar to the average increase in U.S. consumer indebtedness prior to the recession that began in 2008.
Although we cannot predict the future, one thing is certain: If trends such as these continue, many Canadian families and individuals will find themselves under a mountain of debt so large that it will crush them. Spending more than you earn without a plan to get it under control is a surefire recipe for long-term financial disaster. If you live in Nunavut and are struggling under a load of consumer debt, there are ways to pay off what you owe and save money. One of the most popular of these is the consumer proposal.
What is a Consumer Proposal?
A Nunavut consumer proposal is a formal legal arrangement you make with your creditors to settle debts for less than what you owe, lower your interest charges, and establish a payment plan. It is similar to Canada debt settlement except that it requires a licensed bankruptcy trustee, in your behalf, to draw up your consumer proposal. Nunavut trustees then present the proposal to your creditors, who are free to accept or reject it.
The consumer proposal and its stipulations are binding on all your creditors if the creditors who approve the proposal hold at least 51 percent of the total value of your debt. Furthermore, when a consumer proposal in Nunavut becomes binding, you are legally required to satisfy your end of the bargain. That means that you must make your payments on time. If you miss more than three payments, the proposal can be annulled, and creditors are free to come after you for the total that you owe.
Nunavut Consumer Proposal Pros and Cons
When it comes to the consumer proposal, Nunavut residents should know that it is quite similar to debt settlement. In both cases, total debt and the average interest charges you are paying are usually reduced. Both options also leave you with one monthly payment instead of several payments to several different creditors. However, there are significant differences between a consumer proposal in Nunavut and debt settlement. Residents should know about these and how they put the consumer proposal at a disadvantage relative to debt settlement for many residents.
Consumer proposals prevent further interest from accruing on your debt, however a consumer proposal impacts your credit far more negatively than a debt settlement program. In fact, it becomes a matter of public record and causes almost the same harm to your credit profile that bankruptcy does. Moreover, although a consumer proposal can be made binding on all your creditors if enough of them agree to it, a consumer proposal can also be rendered null and void for all your creditors if creditors representing 51 percent of your debt do not consent to it. Finally, debt limitations on the consumer proposal mean that you are not eligible for one if you owe more than $250,000 ($500,000 when married filing jointly). Debt settlement programs have no such limitations.
Get More Information
You want to get out of debt quickly and in a way that is most beneficial for you. Fill out the debt relief form online for more information on your options and to learn which debt solution is best for your unique situation.