Settle Your Debt Without Going Bankrupt.
A Consumer Proposal is a legally binding settlement with your unsecured creditors. It allows you to consolidate unsecured debts* into one manageable payment, usually a percentage of what you owe. Payments and interest on your debts, collection actions and wage garnishment by unsecured creditors* must stop when the proposal is filed. Payments on secured debts, such as a house mortgage or car loan, typically continue if you can afford to keep those assets. A Consumer Proposal must be accepted by a majority of unsecured creditors and be completed within 5 years.
*Some exceptions apply
A Consumer Proposal can only be accessed through a Trustee licensed by the Office of the Superintendent of Bankruptcy for Canada.
We help determine terms of the proposal, which will depend on your individual situation, and will explain the advantages or disadvantages, as well as your rights and obligations in a Consumer Proposal. The Trustee’s role is to file all required paperwork as well as collect and disburse funds during the process. Costs to file a proposal are set by government legislation and are usually incorporated into the proposal payment.
In cases where a consumer proposal is not one of the correct debt solutions for your situation, we can help you select the debt help Kamloops residents have chosen for nearly a decade. Other debt solutions may include credit counselling or bankruptcy.
Why Choose a Consumer Proposal Instead of Filing for Bankruptcy?
While both are good options when you are trying to get relief from debt, a consumer proposal allows for a bit more flexibility, and has a lesser effect on your credit rating than filing for bankruptcy. With a consumer proposal, for example, individuals are permitted to retain most of their belongings and are simply obligated to continue to pay the pre-determined monthly amount agreed upon in the proposal. Filing for bankruptcy can involve liquidating assets in order to eliminate debt, and amounts payable can fluctuate depending on the amount of income you receive or assets you acquire during your bankruptcy.
Benefits of a Consumer Proposal:
- Eliminates debt collection
- Allows for the retention of assets
- Full satisfaction of debt obligations for a reduced overall cost
- Interest ceases to accumulate on debts after proposal is accepted
- No reporting obligations
Do My Creditors Have to Accept the Proposal?
The majority of your creditors by dollar amount (who vote) have to agree to the terms of the proposal in order for it to be accepted (should a creditor not vote, they are legally obligated by the creditors that do vote). Once the majority of creditor vote in favour of the Consumer Proposal, all of your unsecured creditors are legally bound. Most creditors are open to the idea of an amended repayment schedule in order to reclaim at least some of their accounts receivable. In other words, it is often a better bet for creditors to agree with a consumer proposal instead of risking receiving inconsistent or non-existent payments.