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Dealing with Debt Stress

living stress free filing consumer proposalWhen it comes to handling debt, filing a consumer proposal in Ontario can help you reduce your debt and also lower your stress levels.

Debt is stressful for many reasons. You might stay awake at night worrying about how you are going to make ends meet. You might feel anxious every time you check the mail, worried that you’ll find another bill in there. You might avoid answering the phone in fear of it being another creditor or collection agency asking for money.

Most people don’t end up in debt on purpose. However, things happen. Jobs are lost. Homes and cars require expensive repairs. Loved ones get sick and can’t work. Medical and prescription drug costs build up. These situations can very quickly turn into high levels of debt. And this debt can be dangerous to your health.

Debt can lead to a variety of health issues. Not only can debt lead to mental health problems such as depression, anxiety and a higher risk of suicide, but it can also affect your physical health. Being in debt can lead to a greater risk of stroke and high blood pressure. Many people who struggle with debt find themselves turning to doctors, friends, family and other types of support to deal with the stress-related issues. However, for most people, the stress only goes away when a person takes steps to resolve the underlying debt situation.

Filing consumer proposal in Ontario is one of the ways that you can reduce your debt load and ease the financial stress that you are under.

 

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What is a Consumer Proposal?

A consumer proposal is a legal process where a person makes an offer to his or her unsecured creditors to pay them on terms that the person can afford. In a consumer proposal, the offer is usually for a portion of the remaining outstanding debt and the payments are typically made monthly. Once all payments have been made, all remaining debt is considered forgiven. Under a consumer proposal, usually a large portion of the debt will be forgiven while still paying the creditors a fair amount.

When filing a consumer proposal in Ontario or any other province, you are only able to include your unsecured debts. Unsecured debts include credit cards, department store cards, unsecured lines of credit, overdrafts on bank accounts, personal loans and other similar debts. Secured debts, such as your mortgage or any automobile loans that you may have, cannot be included in a consumer proposal. If you are having trouble paying these debts, you will need to speak with these creditors individually.

Consumer Proposal and Relieving the Stress of Debt

Many people find that, once they make the decision to meet with a bankruptcy trustee to discuss their debt situation, they feel relieved. This is likely because they are taking the first step to do something about their debt. By taking this step, people are able to see a clear path towards debt relief. This helps ease anxiety and relieve stress.

When you go in for a (in most cases free) consultation with a bankruptcy trustee, the trustee will review your financial situation and provide you with information on the debt relief options that are available to you. One of these options may be a consumer proposal. If this is the option that you would like to proceed with, the trustee will assist you in completing all required paperwork and submitting an offer that is fair to both you and your unsecured creditors.

Once this offer is accepted, your unsecured creditors have 45 days to decide whether or not they wish to accept the proposal. If the majority of creditors choose to accept, then all are bound by its terms.

Under a consumer proposal, your creditors are no longer able to contact you directly. All communication will be done through your trustee. Your creditors are not allowed to contact you to collect their debts and they cannot send a collection agency after you. In addition, all legal action against you stops as do any wage garnishments. These aspects can reduce your stress levels a great deal. You no longer have to worry about being hounded by creditors.

After filing for consumer proposal in Ontario and having your proposal accepted, your main responsibility is to make the agreed upon payments. These payments are made directly to your trustee, so you do not have to deal with the stress and hassle of remembering to pay a variety of different bills to a number of different creditors. There are no additional charges or bankruptcy trustee fees. Instead, you need to only focus on making your regular payments. This helps ease the stress of paying down your debt. Plus, having to pay less each month will take a huge load off of you, reducing stress even further.