When it comes to marital breakdown and financial difficulty, it‘s the old chicken and the egg story. Without a doubt, financial difficulty resulting from excessive debt levels, can put stress on a relationship, ultimately resulting in the dissolution of a marriage.
On the other hand, when a marriage dissolves, financial difficulties often develop as there are now two separate households to support, with no change to the overall income.
In either scenario, help from a Licensed Insolvency Trustee is advisable. Most people are not aware of the fact that there is legislation that allows debtors to make an offer to their creditors, tailored to their specific circumstances, that can result in a significant reduction in the amount of debt required to be repaid.
The structured proposal, known as a Consumer Proposal, is an interest free payment plan that is often as little as thirty percent of the total amount owed. The payment is typically spread out over a five year period. Filing a Consumer Proposal in the face of, or after marital breakdown, can give the separating parties peace of mind.
With marital breakdown comes a lot of change. Managing children between two households, emotional stress due to the breakdown, and learning to budget on a single income, are just a few things. When these pressures are coupled with debt repayment, it can be overwhelming.
Making a Consumer Proposal that deals with all of the creditors in one fixed payment, will make it easier to set a fixed budget to deal with the regular day to day expenses in running the new single income household. And, since payments will be greatly reduced from the current minimum monthly payments, the ability to manage and budget your household affairs will be greatly increased.
If you would like to know how a Consumer Proposal can help you and your family to get out of debt, schedule a free, no-obligation consultation with one of our licensed debt relief professionals.
Read more about spousal debt and bankruptcy:
- Does Filing for Bankruptcy in Canada Affect My Spouse?
- The Effect of Bankruptcy on Spousal Support Payments