| By :
Adriana Noton
If your liabilities are beyond control, debt settlement will be extremely necessary. The decision is a very tough one but it is the best solution for this type of money problems. Dealing with credit issues is a daunting task and you must look for advice of an attorney or a creditable counselor. The problem has to be thoroughly investigated in order to come up with a levelheaded solution which can be either a consumer proposal or a bankruptcy solution. Depending on the method, different benefits are enjoyed by clients. If you are interested in filing a consumer proposal, you need to meet a trustee in bankruptcy. The main purpose is to discuss the possibility of funding such a proposal. You need to have an adequate income for the settlement of payments and therefore your living expenses will be considered. Some times financial assistance can be obtained from friends and family members. Voluntary liquidation of assets is another option. However, what you can afford to pay has to be accepted by the creditors. The bankruptcy trustee will draft the proposal and then file it with the superintendent of bankruptcy or the SOB, which monitors bankruptcy and insolvency proceedings in the country. The SOB will send the information to the creditors for review and will prevent them from taking any legal action against you. A voting letter will also be posted along with the information, which needs to be duly filled and submitted. The way the creditors indicate their vote is very important for the future steps. The voting letter has to be filled and filed with the trustee along with proof of claims. The votes will be reviewed by the trustee before moving ahead. If voting No comprises less than 25% of the value of claims, it will be assumed that the creditor has accepted your proposal and the future proceedings will be simple. If the voting No is 25% or more of the value of clams additional steps involve before the settlement. In this case, your bankruptcy trustee will have to arrange a meeting with all the creditors. The purpose is to discuss and make necessary amendments to the proposal so that both parties will agree. Once it is accepted, the payment arrangement can be made. The distribution of the proceeds to the creditors will be on a periodical basis. During the process your credit rating with the credit bureau will go down to R9. However, it will improve up to R7 once the process is completed. The R7 rating will remain for 3 years before it is deleted and you can enjoy future improvements. The advantage of filing a consumer proposal is the fact that your creditors cannot take action against your properties. If you are unable to settle debts due to insufficient income, filing bankruptcy is the other option. The creditors then cannot make any payment collection until you are discharged. You will need to pay higher rates for a particular period of time after you are discharged. The client's credit report will contain these discharge records as long as fourteen years. Finding a good debt settlement solution is a challenging task. That is why you need to consult a licensed bankruptcy trustee who is well experienced. The right expert can not only solve your problem but also give you a new life.
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