PEI Consumer Proposal
With all the economic upheaval of recent years, economists have been particularly keen to look for signs of future trouble on both macroeconomic and microeconomic levels. While the verdict is out on how the global marketplace will affect Canada’s economy in the years ahead, there is quantifiable data to indicate that some Canadians will have a hard time navigating the financial waters if they do not take steps now to improve their financial picture.
Prince Edward Island is one province that has recently caused economists great concern. Although the average level of household debt remains well under the Canadian average, PEI household spending habits indicate that this may not be the case for long. Furthermore, average PEI household spending levels were down, indicating that PEI residents may have less disposable income than in previous years. This increases the risk that more PEI consumers will default on at least some of their debt.
If you live in PEI and see your debt increasing faster than your ability to pay it down, you may be heading for serious financial trouble. However, there are debt solutions that can help you get out of debt and improve your overall financial picture. One of the most popular of these is the consumer proposal in PEI.
What Is a PEI Consumer Proposal?
When it comes to the basics of the consumer proposal, PEI residents should know that it is a way to secure many of the protections of bankruptcy without having to go through the lengthy and costly bankruptcy process. Created with the assistance of a licensed bankruptcy trustee, a consumer proposal is a formal agreement with one’s creditors for them to consider debts paid in full for less than what is actually owed. Creditors usually agree to freeze interest charges as well. The result is a reduced debt load that is much easier for you to pay off.
Advantages and Disadvantages of the PEI Consumer Proposal
To understand the consumer proposal better and know whether or not it is the right debt solution for you, you should keep these key points in mind:
• A consumer proposal in PEI is good for those with a high level of consumer debt. You qualify if you owe less than $250,000; $500,000 is the upper limit for married couples filing jointly.
• All of your creditors must accept the terms of your consumer proposal if creditors representing at least 51 percent of your debt agree to it.
• The consumer proposal protects your assets from seizure.
• A consumer proposal costs less than bankruptcy in terms of your financial outlay. It costs more than debt settlement in terms of your creditworthiness, however, because a consumer proposal has a similar effect on your credit history as a bankruptcy.
• You may not qualify for a consumer proposal if you have too many assets.
• There are situations that can force you to pay back 100% of what you owe or even force you to file bankruptcy in which you will have to forfeit all non-exempt assets.
For More Information
You should know much more before making your final decision on the consumer proposal. PEI residents who fill out the Canadian debt relief form can learn more about consumer proposals, debt settlement, and other debt solutions in Canada.