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This measure, also known as an informal proposal, allows you to negotiate an agreement with your creditors without resorting to the mechanism provided by the Bankruptcy and Insolvency Act.
BENEFITS of informal negotiation with creditors
- May be the only informal solution if your financial institution has turned you down for a consolidation loan.
- Allows you to present an offer according to your budget.
- Possibility to avoid bankruptcy.
DISADVANTAGES of informal negotiations with creditors
- This is a process that is not regulated by law. You may think you have negotiated an agreement with a collection agency, and then your file is transferred to another agency and your agreement has to be renegotiated.
- There is no stay of proceedings, and your creditors can continue their recourse against you.
- Creditors have no obligation to participate in the informal proposal
- Difficult to manage if there are several creditors