Consumer proposals come in all shapes and sizes, including the not uncommon “lump sum payment” variety. Many Consumer Proposals are based on a simple monthly payment format but some consumer debtors can offer a lump-sum proposal to their creditors, usually with the help of a family member or friend, by remortgaging an existing home, selling off a specific asset or cashing out an investment (such as a TFSA or a stock portfolio).
The advantages of a lump-sum proposal over a traditional Consumer Proposal include:
A lump sum proposal is only finalized once a simple majority of your creditors (by dollar value of debts owed) vote in agreement to accept the proposal. Once that acceptance is in place, the lump sum is paid by the consumer debtor and the proposal is successfully completed shortly afterwards.
Creditors will accept a lower repayment at the start of the payments, rather than having to wait up to a maximum of five years for monthly payments to accumulate and be distributed to them.
If you feel you have access to a large lump sum, either from a family member, by refinancing your home or by cashing out an investment account, then consider a lump-sum proposal over a traditional Consumer Proposal to speed up the entire process and get back on track faster financially.