{"id":431,"date":"2022-03-23T11:50:28","date_gmt":"2022-03-23T11:50:28","guid":{"rendered":"https:\/\/www.debtcontrolagency.com\/one-way-your-customers-can-clear-debt-consumer-proposals\/"},"modified":"2022-03-25T20:13:06","modified_gmt":"2022-03-25T20:13:06","slug":"one-way-your-customers-can-clear-debt-consumer-proposals","status":"publish","type":"post","link":"https:\/\/www.debtcontrolagency.com\/fr\/one-way-your-customers-can-clear-debt-consumer-proposals\/","title":{"rendered":"One way your customers can clear debt: Consumer proposals"},"content":{"rendered":"

\"SmilingIn their quest to clear debt, your customers can go through potential options to make sure they’re paying it off in a way that’s best for both parties. One alternative route that can make sense for some is the consumer proposal, and it\u2019s a legal option in Canada.<\/p>\n

According to the Government of Canada\u2019s website, a consumer proposal<\/a> is an agreement between a business and someone who needs to eliminate debt. Although they vary in terms, they’re meant to reduce debt within a five-year span.<\/p>\n

The proposal is submitted to you through a third party that\u2019s approved by the government, called a Licensed Insolvency Trustee (LIT). They act as an intermediary to make sure the proposal takes place and that everything is legally binding.<\/p>\n

A look at the pros and cons<\/strong><\/p>\n

There are many reasons why a consumer proposal is a great alternative to something such as bankruptcy. The cost to the customer is $1,500, quite a bit less than other legal proceedings to clear debt. It\u2019s also common to pay up to 20% as part of the payment cycle, meant as a service fee for the LIT that sets things up.<\/p>\n

There’s a disadvantage to a consumer proposal that does give some customers pause, and that\u2019s the credit rating. According to that government website, a consumer receives the lowest possible credit score upon the proposal’s acceptance. The timing of removal can vary depending on the circumstances as well as the specific province. That’s because different jurisdictions have different rules.<\/p>\n

Commonly, the proposal will stay on the credit report for the length of the terms, and then usually a handful of years after. During that time, it\u2019s up to lenders to decide whether to extend credit.<\/p>\n

Giving businesses a helping hand<\/strong><\/p>\n

There are several reasons why it could be advantageous<\/a> for a business to encourage a consumer proposal. According to the NerdWallet website, they include:<\/p>\n