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Another option for debt reduction is to hire a law firm to negotiate a settlement with all your creditors, also tagged a “consumer proposal”. Of course your credit rating is damaged through this process, but that’s a price we have to pay when we let our debts get out of control. These arrangements are similiar no matter what state, province, or country you live in. The lawyer or trustee negotiates a settlement where you pay back a percentage of the money owed - 30-40-50 cents on the dollar in most cases. The most important aspect of a consumer proposal is your stress level. All your creditors are now dealt with by the legal authority. Many of the professionals that offer consumer proposals pitch their service as an alternative to bankruptcy. Keep in mind that consumer proposals (or bankrupcty alternatives) are not prevalent in all countries. Most parts of Europe still don’t allow consumers to pull out of debt and start over. The fact is that a consumer proposal is a process that can be beneficial to the banks and creditors just a the consumer. This way the creditors can at least re-coup much of the money they are owed. Check in your area for a law office that deals with consumer proposals. You may be surprised to find out you don’t have to go towards full blown bankruptcy.
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