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Determining a Debt Settlement Answer

     Finding a debt settlement solution is not always easy, but borrowers with money problems have more options than they realize. In Ontario, strapped borrowers may utilize either a consumer proposal Toronto or a bankruptcy Toronto, to discharge all or a portion of their debts. Borrowers may talk to a Toronto bankruptcy trustee, who is licensed by the government, in order to review all possible alternatives.

A consumer proposal is a legally binding agreement. The proposal, which is negotiated between individual borrowers and creditors, may allow settlement, if total debts amount to less than $250,000. Consumer proposals either offer to pay a percentage of debts over time, or ask for an extended period of time for the payoff of debt. Borrowers make payments to their bankruptcy trustee Toronto, who then submits payments to creditors.

Trustees file proposals with the Office of the Superintendent of Bankruptcy. Once proposals are filed, all payments to unsecured creditors, wage garnishments, and interest rate increases must stop. Creditors then have forty-five days to either accept or reject the proposal. If the creditors who own a majority of the debt approve the proposal, then the proposal is binding for all creditors.

Consumer proposals will negatively affect a borrower's credit report. The credit rating will drop to R7, and the proposal will stay on the report for three years. Borrowers will also be required to attend two mandatory financial counseling sessions, with their trustee. If a borrower misses three monthly payments, or payments become more than three months past due, then the proposal is annulled. If the proposal is annulled, creditors may take court action, to recover what borrowers owe.

Bankruptcy allows borrowers to discharge all debts. The borrower's property is given to the trustee, who sells the property, and distributes the proceeds to creditors. Unsecured creditors will no longer be able to seize property, or to initiate wage garnishment.

A trustee will help bankrupts to fill out the proper forms. The assignment form lists assets, liabilities, income, and expenses, and outlines the borrower's family and employment situations. When the assignment is filed with the official receiver, only a court order will negate the bankruptcy. The borrower, as with a consumer proposal, must attend two financial counseling sessions with the trustee.

Debts are usually discharged automatically after nine months. All debts, with the exception of alimony, child support, student loans, court-imposed fines, or debts arising from fraud, are forgiven. The bankruptcy remains on the credit report for seven years, and drops the credit score to R9. Bankrupts also lose the ability to hold money in trust, or the ability to hold certain civil positions.

Choosing a bankruptcy trustee Toronto is as simple as searching the Yellow Pages. However, consumers should never allow a person who is not licensed by the Canadian government to represent them in a debt settlement case. CAIRP, or the Canadian Association of Insolvency and Restructuring Professionals, is a group which adheres to rules of professional conduct, and standards of professional practice. A CAIRP member will provide trustworthy and fair administration of any debt settlement.

Offering a FREE no-obligation consultation, Debt Settlement experts have been helping Canadians for over 30 years.

Offering a FREE no-obligation consultation, Debt Settlement experts have been helping Canadians for over 30 years.

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Offering a FREE no-obligation consultation, Debt Settlement experts have been helping Canadians for over 30 years.

Posted on 2012-09-03, By: *

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