A consumer credit proposal is a legal document of a negotiated agreement between a person and his creditors (people he owes money to); where the person pays only a part of his debt, in order to avoid bankruptcy. This proposal has certain advantages like the person is not required to mortgage any property, the creditors cannot take legal actions against the person, interests stops at the date the person files and so on.
Sample Consumer Credit Proposal:
This consumer credit proposal, made between Mr. Tony Brown and Mr. Larry Bates (creditor), whereby it is said that the person pays a part of his debt if he fails to pay on the date mentioned. The maximum length of the repayment tenure is five years and the interest accumulation will stop after the 15th day of September 2016. It is stated that Mr. Brown can negotiate to repay a part of the debt that he owes to Mr. Bates. It is also stated that the time of debt repayment can be extended by Mr. Brown.
The creditor is to note that no legal action can be taken against the person, who has taken the loan under the Bankruptcy and Insolvency Act. The debt of Mr. Tony Brown is $ 50,000 and he claims to return it by 15th of September, 2016. The collection activity of the creditor shall stop at the date that Mr. Brown files, including wage garnishment. However the creditor is to vote for or against this proposal, if he wishes to agree on this settlement.
(Signature of creditor in favor of the proposal)
(Signature of creditor against the proposal)
(Signature of the person taking the loan)