If you’ve fallen on tough financial times and are struggling to pay your bills, you should consider a Consumer Proposal. A Consumer Proposal is a government debt relief solution that can reduce the debt you owe and help you regain your financial footing. If you need help with your debt, you should not have to face it alone. Contact a Licensed Insolvency Trustee (LIT) to learn more about Consumer Proposals in New Brunswick. We Can Help™
What is a Consumer Proposal?
A Consumer Proposal is a legal debt relief solution only a Licensed Insolvency Trustee can administer. In a Proposal, you work with your LIT to develop an offer to pay your creditors a percentage of what you owe, to extend the time you have to pay your debt, or both.
Who is eligible for a Consumer Proposal in New Brunswick?
Eligibility for a Consumer Proposal requires that:
- You are an individual (not a corporation)
- You are a resident of Canada
- You are insolvent (can no longer pay your debts on time)
- You owe less than $250,000 (not including your mortgage)
To find out if you’re eligible for a Consumer Proposal and if it’s the best solution for your mounting debt, speak to a LIT. They are the only qualified resources in Canada to assess your debt situation and let you know if a consumer proposal will work for you. If not, they will help you understand your options to find another solution.
How Does a Consumer Proposal Work in New Brunswick?
If you decide to proceed with a Consumer Proposal, your LIT will file your offer with the Office of the Superintendent of Bankruptcy (OSB). Your LIT will then submit your proposal to your creditors who have 45 days to accept or reject your proposal.
If your proposal is accepted:
- You are responsible for making lump sum payments to your LIT who will pay your creditors on your behalf
- You have to attend two financial counselling sessions
- You have to adhere to all conditions stated in your proposal
If your proposal is rejected:
- You can update your proposal and resubmit it
- Consider other debt solutions
- Declare Bankruptcy
Will I Lose My Assets in a Consumer Proposal?
Worried about losing your assets if you file a Consumer Proposal? As long as you can pay your bills, you can keep your house, car, and other secured assets. Your LIT will review this with you before filing a proposal to make sure these assets are secured and you have the ability to pay.
Will a Consumer Proposal Lower My Credit Score?
Filing for a Consumer Proposal will negatively affect your credit score. When you submit a Proposal, you’re typically assigned the lowest possible score. A proposal will stay on your credit report for three years after you pay off all debts included in your proposal or six years after signing, whichever is sooner.
Consumer Proposal Statistics in New Brunswick
If you feel embarrassed or overwhelmed about filing a Consumer Proposal, know that you’re not alone. The popularity of Consumer Proposals over Bankruptcy has been growing for the past number of years. In Q1 of 2024, New Brunswick consumers filed 670 proposals compared to 600 in Q1 of 2023, that’s a 12% increase.
This parallels the overall national trend. Across the country, there’s been a 15% increase in proposals from Q1 2023 to Q1 2024. There were 23,460 proposals filed in Q1 2023 compared to 27,036 in Q1 2024.
Pros and Cons of a Consumer Proposal New Brunswick
Like most financial decisions, filing for a Consumer Proposal comes with a combination of pros and cons which include:
Pros:
- Protection from creditors (wage garnishment, lawsuits, and collection calls will stop when you file)
- Reduce your monthly debt payments
- Keep your home, car, and other assets
- Avoid filing for Bankruptcy
Cons:
- Your creditors may reject your Proposal
- Doesn’t include all debts (alimony, child support, court fines etc.)
- Will have a negative effect on your credit score
Alternative Debt Solutions
If you’re not eligible for a Consumer Proposal, there are other debt solutions available, including:
Debt consolidation New Brunswick
Debt consolidation involves rolling up multiple debts and paying them off with one large loan or balance transfer credit card. This helps to simplify the debt repayment process. Instead of juggling multiple debts with different due dates and interest rates, you have one monthly debt payment.
Credit counselling New Brunswick
If you want to learn more about budgeting, how to use credit, or pay off debt, you might benefit from credit counselling. Credit counsellors offer individual and group sessions where you can increase your financial literacy and learn new strategies to manage your money.
Personal Bankruptcy New Brunswick
Like a Consumer Proposal, Bankruptcy is a legal government debt relief program that reduces the debt you have to repay. In Bankruptcy, you are discharged from many of your unsecured debts. In exchange, your LIT will sell some of your assets to try and repay your creditors.
Is a Consumer Proposal The Right Debt Solution?
If you need debt help and want to avoid filing for Bankruptcy, ask a LIT about a Consumer Proposal in New Brunswick. Licensed Insolvency Trustees are the only professionals in Canada who can administer a Consumer Proposal. For a free, no-obligation consultation, call Allan Marshall & Associates at 1- 888-371-8900 or fill in our online contact form to find out more.
