VANCOUVER -- Dealing with debt can be extremely stressful.
When hit with tough times financially, bankruptcy is not the only option.
Taz Rajan of Bromwich + Smith joined CTV News at noon to explain consumer proposals.
Rajan says they are one of the best alternatives to bankruptcy because:
- Negotiated settlement with legally binding protection from creditors
- Assets do not vest with the trustee
- Up to a maximum 5 years
- Can pay off early
Rajan explained they do remain on a credit report for three years after completion or a maximum of seven years.
That said, it is not something that necessarily damages your credit in the long run.
Credit rating is a tool for potential lenders to see if you're a good loan risk.
Rajan shared that you can actually qualify for best rates and terms within two years after completing a consumer proposal.
Rajan emphasized that bankruptcy is the last resort, but it isn't the end of the world.
They differ from consumer proposals in that they are a legally binding protection from credtiors.
Assets do vest with the trustee, first time bankruptcy with no surplus income is nine months and it remains on a credit report for six years after discharge or a maximum of seven.
As Canadians, we have federally legislated rights to exit from debts when we are insolvent or can no longer pay our debts as they come due.
Ranjan says people should reach out if they need help and not let fear or stigma stop you from consulting with an expert.
Bromwich + Smith provides a free, unbiased, impartial, no obligation advice on the best option for moving forward.
