If you have ‘inherited’ debts from the breakup of a marriage, and have accompanying crippling legal fees, it may be wise to make a fresh financial start. You could consider a Consumer Proposal.
Too often, debts from a broken marriage are one of its remaining legacies. Whether joint or individual, these do not go away quietly. And after months (or years) of emotional upheaval and stress, remaining debts are most unwelcome.
The breakup of a family unit means incomes are greatly reduced and each party now has their own bills in addition to those remaining from the marriage. With interest rates on credit cards, lines of credit and retail card balances, a newly single person can be in dire financial straits when it comes to paying their obligations.
One alternative for those in this situation may be a Consumer Proposal. A proposal is a legal arrangement made with all unsecured creditors through a licensed trustee. There is no interest, and it can often involve paying only a portion of the debts off to clear them. There are also no penalities for paying it off earlier, and the person retains their assets (house, car, investments etc.). Proposals are rapidly gaining popularity as an alternative to bankruptcy.
So who is eligible?
If your total unsecured debts (credit cards, lines of credit, retail cards etc.) are over $1,000 and if you can afford a reasonable monthly payment to pay a portion of your debts, you can file a proposal. You must have less than $250,000 in unsecured debts not including your mortgage.
Proposals provide legal consumer protection from creditors and they can no longer contact you in any way (so no more harrassing phone calls day and night). Wage garnishees cease, all legal actions (lawsuits) are stayed and the proposal is a legally binding contract with your creditors. When complete, a court certificate is issued that absolves you of any further obligations.
And, in a proposal, you are free to make more money if you are able. So career advancement during a proposal is not restricted.
So what do you have to do to get started?
Speak to us. We’ll arrange a free consultation to see what kind of settlement can be made. Often it involves paying only 20-30% of your total debts to clear them all. You will leave knowing what you can do about your debts to move on with your chapter in life.