Is It Possible To File For A Joint Consumer Proposal?
There is a significant drop in the percentage of bankruptcies filed by Canadians for a couple of years. This is the result of the residents being more cautious about getting a loan or borrowing. Also, most of those who are insolvent are seeking debt relief programs to settle their debts. One of the primary reasons that trigger the decreasing numbers is the fact that the residents are turning more vigilant and aware that bankruptcy should only be considered as the last resort, and should seek first a consumer proposal before bankruptcy.
A consumer proposal proposes several advantages that you can get from filing bankruptcy and excludes most of its negative aspects. In a consumer proposal, you are not urged to surrender any of your assets, unlike in bankruptcy. Moreover, a consumer proposal offers more flexible process allowing you to file on your own or with another person.
However, before you decide to consider a joint consumer proposal, it is better that you know how it works. Having adequate awareness and knowledge about filing for a joint consumer proposal makes it easier for you to decide whether to file or not file jointly.
Who Can Qualify For A Joint Consumer Proposal?
The laws in Canada do not complicate the filing for a consumer proposal jointly. Joint filing is common among Canadians. You can file for a joint consumer proposal if you have close family members or a partner in your business who suffice the indebtedness criteria for a consumer proposal, and the debts to be dealt with in the proposal are deemed common for both. Besides, there are no fix regulations as to the amount of debt acquired by both individuals who file the proposal. However, most creditors and the trustee will not accept joint filing for a consumer proposal if both individuals do not have a minimum of 90% of debt in their names.
Furthermore, most trustees and creditors will likely accept joint-filing since there are no regulations set; provided, your proposal is logical for them and both individuals. Joint filing for a consumer proposal is common to husbands and wives, business partners, either one of the parents and kids and both siblings. Although two partners in business can file for a joint consumer proposal, each one shouldn’t have a huge sum of debts to be surely accepted.
What Are My Other Options?
There are other options available for someone who can’t cope up even paying the minimum of their debts. Bankruptcy as a means to free you from indebtedness should be considered as the last resort. Moreover, other debt solutions include debt settlement, debt consolidation, consumer credit counseling, and a consumer proposal. Exploring your options and understanding each will help you weigh what is the best option for your situation.
Is Filing a Joint Consumer Proposal the Right Choice for Me?
When you seek the best debt solutions, you have to understand your circumstances. Whether you seek to consider for a debt settlement, credit counseling, debt consolidation, or a consumer proposal, you have to carefully analyze and assess your financial status.
Most people prefer to file for a joint consumer proposal since it enables them to contain much debt in the proposal rather than filing individually. Single filing requires a sum of $250,000, while joint filing can accommodate up to a sum of $500,000 debts. Besides, when you file for a joint consumer proposal, you can save administration costs. Most importantly, since the duration of your repayments decreases symmetrically to the increase of money that goes in your debts, a joint consumer proposal makes you save extra money that you can use to pay the principal of your debt.
In contrast, a negative aspect of a joint consumer proposal is that both filers are held accountable in paying the agreed amount. For instance, if your proposal stipulates a payment amount of $1,500 with you and the other filer in agreement to pay $750, if in case the other individual is unable to make the required payment, you will be held liable to compensate for the amount. Besides, you are likely to contribute the lacking amount since your proposal will be annulled if you fail to do so.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.