There are two options for people who are reeling under the burden of mounting debts. Choose either bankruptcy or a consumer proposal. Both the options have their own merits and demerits. If you think that you won’t be able to pay all your debts with the meager income you earn, it is high time you chose one of the options available to you.

Financial experts suggest that making a consumer proposal is far better than bankruptcyfor different reasons. You can continue to possess your assets and your credit will not be so severely damaged as in the case of bankruptcy. Before we go further, it is necessary to understand what a consumer proposal is. It is a proposal made by a person in debt to his / her creditors to accept a smaller monthly payment for a certain period of time. Only persons whose debts amount to more than $5, 000 but less than $250, 000 are eligible to make the proposal. Your proposal is presented to all your creditors and if most of them accept your proposal, it becomes an agreement binding on all your creditors. Once the proposal is in force, you will not be charged any interest on your debts and no legal actions will be taken against you by your creditors. Since your creditors know that they would get nothing or very little if you opt for bankruptcy, there is a higher chance for your proposal to be accepted by your creditors. But if you fail to make timely payments twice as per your proposal, the proposal will be deemed invalid and you will be back to square one. To see whether you are eligible to make such a proposal and to draft the necessary documents, you need the help of a licensed legal practitioner or a bankruptcy trustee. A very important thing you have to remember is that you can make a proposal only to your unsecured creditors.