Advantages of Using a Consumer Proposal Calculator for Debt

A consumer proposal calculator can tell you how much you need to pay for your monthly settlements. Whether you are filing for bankruptcy, submitting a consumer proposal, or dealing with debt consolidation, you can use this tool.

The goal of a consumer proposal calculator is to help you determine how much you need to prepare for the various payments you have to cover. You will have to work with your Licensed Insolvency Trustee (LIT) for this.

It will be the job of your LIT to check the proposed total payout and divide it by the number of months on your proposal. The computation should also include the expected results and the requirements that creditors have imposed.

What a Consumer Proposal Calculator Does

It is helpful to know the specific functions of a consumer proposal calculator before using it. The calculator can show you how much you have to pay over a month or over monthly periods. You can also find out your expected debt consolidation payment each month.

The great thing about the tool is that you can also add in factors such as the effect of credit counseling, wherein you repay your unsecured debts 100% at a 0% interest rate. When you go for debt settlement, you assume to pay about 50% of your unsecured debts.

There’s no need to worry, as consumer proposal calculators include a variety of debts. You can compute debts under unsecured personal loans, payday loans, credit cards, bank overdrafts, and lines of credit. What’s not included are student loans, car payments, and mortgages.

Benefits of Using a Consumer Proposal 

You can always use the consumer proposal calculator if you want to create a consumer proposal. Before you decide on anything, talk with your LIT about what the best option is to repay your debts. Below are some advantages of going for consumer proposals.

1. Consolidates Debt Into One Payment

With a consumer proposal, you can easily consolidate all your debts into one payment. One of the many reasons why debtors struggle with paying creditors is because they are confused about whom to prioritize. Combined with anxiety and stress, many debtors can’t decide who to pay first.

A debt proposal involves working with your LIT and having them pay your creditors directly. You don't have to worry about facing or meeting any of your creditors because your LIT will take care of that for you.

There’s also no need for you to maintain good credit standing to get approval for a consumer proposal. It’s a convenient way for debtors who are struggling with debt and credit ratings to be able to pay off what they owe.

2. Protects Your Assets

It can be stressful to think that you have to let go of some of your precious assets. When you declare bankruptcy, there is a high chance that you will have to give up some assets to repay your debts. However, if you go for consumer proposals, you can repay what you owe in other ways.

With a consumer proposal, you can repay your debt little by little over months or years. The maximum time to pay off debt under debt proposals is 60 months or about 5 years. Your LIT can help adjust the time to make it shorter if you prefer paying that way.

There are situations where you can pay under 48 months or 4 years or even under 36 months or 3 years. It all depends on your financial capability or the terms stated in the proposal. The total time frame will determine the amount you will be paying.

3. Avoiding Bankruptcy

It can be stressful to think about how to repay your debts when your credit rating is down. Some debtors feel like bankruptcy is their only way out, but it’s not always the case. Remember that there are other options such as a consumer debt plan which can work for people with bad credit ratings,

The great thing about a debt payment plan is that you won’t have to declare bankruptcy and have a record on your credit report. It’s one of the best alternatives for people who can’t file for bankruptcy and those that want to keep their assets,

You don’t have to worry about deciding because your LIT will help you understand the situation. They will talk with you about your current financial situation and will give feedback and suggestions on which option goes best.

4. Controlling How to Repay Your Debts

Consumer proposals make it more flexible for debtors to repay debt. You are allowed to make an up-front lump sum payment once as long as you have the funds. It’s also possible to structure your term plans from 3 months to 60 months.

When you want to make larger payments, you can also state it on your consumer debt plan. It will be the responsibility of your LIT to arrange these payment plans on your behalf. What’s important is to have your creditors agree with the terms of the debt plan. 

It will also be the role of the LIT to meet and discuss your terms with the creditors. Once both parties agree, you can begin paying your debt under one manageable payment plan. It's more convenient and hassle-free for both creditors and debtors.

5. Protection from Legal Action

There are cases where creditors cross the line and start to harass and be aggressive toward debtors. You can immediately stop these actions when you go for a consumer debt plan. Everything from garnishing wages from your job to directly contacting you will stop.

Your creditors will not be able to call you or contact you in any way. That means you have peace of mind and also less stress under a consumer proposal. You can then discuss your next plan with a LIT without having to fear creditors constantly hounding you.

Having a debt plan protects you from all harassing actions from creditors. You don’t have to deal with stressful phone calls, spam emails, or creditors paying a visit to your home. No creditor can demand payment from you as long as you have a consumer proposal.

Why It’s Important to Submit a Consumer Proposal

It would surprise you how much you calculate when using a consumer proposal calculator. Sometimes your potential monthly payment becomes lower once the terms are combined with your payment.

Other times, you’d think that your initial payment is hefty and you can't afford it, but once you run it through the consumer proposal calculator, it becomes more manageable. You can gain plenty of benefits from consumer debt plans, especially when lowering payments or having fixed payment plans.

Some debtors find it easier to have single monthly payments that would be divided among their creditors rather than addressing each creditor with different payment plans. Using the consumer proposal calculator makes repaying your debt more straightforward and faster.