Life is unpredictable. Unexpected circumstances can often lead to financial challenges that may feel insurmountable. Luckily, there is help available in the form of a Consumer Proposal.
As Licensed Insolvency Trustees serving the vibrant communities of Coquitlam and Port Moody, British Columbia, we can assess your financial situation and explain if a Consumer Proposal is the right debt solution for you.
What is a Consumer Proposal?
A Consumer Proposal is a legal process administered by a Licensed Insolvency Trustee. In a proposal, you work with your LIT to create an offer to pay a percentage of what you owe, extend the time you have to pay, or both. The maximum term for a Consumer Proposal is five years.
How do Consumer Proposals differ from Bankruptcy?
There are a few differences between a Consumer Proposal and Bankruptcy, these include:
- Purpose. The purpose of a Consumer Proposal is to negotiate a partial repayment plan between you and your creditors. The purpose of Bankruptcy is to provide a fresh financial start to those who are really struggling.
- Assets. You get to keep more of your assets in a Consumer Proposal than in Bankruptcy.
- Repayment. In a Consumer Proposal, you have to repay a portion of your debt. In Bankruptcy, most of your unsecured debts are typically eliminated.
- Credit score. While a Consumer Proposal will have a negative impact on your credit score, it is typically less severe and will stay on your credit report for a shorter amount of time than a Bankruptcy.
- Who is Eligible For a Consumer Proposal?
To file for a Consumer Proposal, you must meet the following eligibility criteria:
- You are an individual
- Debt does not exceed $250,000 (excluding your mortgage on your primary residence)
What Debts Are Included in a Consumer Proposal?
Only unsecured debts are included in a Consumer Proposal. Unsecured debts include:
- Credit card debt
- Lines of credit
- Payday loans
- Personal loans
- Student loans (if you’ve been out of school for more than seven years)
- Utility bills
Secured debts such as your mortgage or car loan are not included in a Consumer Proposal.
What Are The Benefits of a Consumer Debt Proposal?
As soon as you file for a Consumer Proposal, any wage garnishment or creditor lawsuits against you will stop. Additional benefits include:
- Reduced debt payments
- Affordable monthly debt payments
- Additional time to repay your debt
- Elimination of interest charges
- Help rebuilding your finances
Alternative Debt Solutions
Depending on your financial situation, a Consumer Proposal might not be the right solution for your debt problems. Luckily, there are other financial supports available, including:
Credit Counselling Coquitlam-Port Moody
In credit counselling, you dig into the root causes of your debt issues and work on improving your financial habits. For instance, if you are dealing with credit card debt, your counsellor might teach you how to use credit appropriately and help you develop a budget and a plan to get out of debt.
Debt Consolidation Coquitlam-Port Moody
Debt consolidation is the process of combining several separate debts into one easy-to-manage monthly payment. There are different ways to consolidate your debt including taking on a debt consolidation loan, balance transfer credit card, or using a more formal debt solution like a Consumer Proposal.
Personal Bankruptcy Coquitlam-Port Moody
Filing for Bankruptcy is typically the last resort. While no one wants to declare Bankruptcy, the purpose is to provide honest Canadians with a second chance. When you file for Bankruptcy, you have to surrender many of your assets in exchange for the elimination of your debts.
Get Financial Help With a Consumer Proposal in Coquitlam – Port Moody
A Licensed Insolvency Trustee is the only professional in Canada who can administer a Consumer Proposal. If you want to find out if this is the right debt help option for you, your first step is to reach out to an LIT.
The debt experts at Allan Marshall & Associates can walk you through how Consumer Proposals work, and answer your questions. If you’re tired of dealing with debt and ready for a fresh financial start, call us at 1-888-371-8900 or contact us online for a free, no-obligation consultation.
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