Avoid Bankruptcy with a Consumer Proposal to Creditors  A Consumer Proposal to Creditors (or a Personal Proposal to Creditors) is an alternative to full Bankruptcy.  It is a binding agreement, between a debtor and creditors, that sets out how the creditors will be repaid over a period of time.

Benefits and Consequences of a Consumer Proposal to Creditors  By agreeing a Consumer Proposal to Creditors, debtors will avoid the stigma and restrictions of Bankruptcy, some of the costs associated with a Bankruptcy will be avoided and creditors may get more than they would from a Bankruptcy.

Your actual benefits as a debtor will depend on your personal circumstances and assets.   You may be able to prevent any further interest accumulating on your debts and you may even be able to get some of your debts written off - perhaps as much as 75%.  Provided you manage your finances appropriately, your should be able to become free from debt in a few years and should be able to keep your house and car.

You will be restricted with regards to taking out further debts during the agreed payment period and retain an adverse credit record for some time after that.  Defaulting on an IVA could result in Bankruptcy proceedings.

Steps to obtain a Consumer Proposal to Creditors Agreement 

• Find an Authorized Insolvency Practitioner to act for you.

• Apply for an "Interim Order" preventing creditors from proceeding with other action against you.

• Prepare a Proposal to all your Creditors.

• Hold a Creditors Meeting - if enough Creditors vote to accept the proposals, the agreement is binding on all of them.

• Supervise the arrangement and pay creditors in accordance with the accepted proposal.

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Consumer Proposal (Personal Proposal to Creditors)

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