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Find Debt Solutions – Consumer Proposal Vancouver Island

Consumer Proposal Vancouver Island

Known for its rugged coastline, natural beaches, and mild climate, Vancouver Island is a beautiful place to call home. But, island life can be expensive. If your debt is causing your stress and you can’t pay your bills on time, you might consider filing a Consumer Proposal. 

A Consumer Proposal can be a great option for those that want to avoid Bankruptcy. It provides debt relief and protection from your creditors. If you’re considering a Consumer Proposal in Vancouver Island, you can meet with a Licensed Insolvency Trustee (LIT) to assess your finances and determine if it’s the right debt solution.

What is a Consumer Proposal?

A Consumer Proposal is a formal debt relief solution that allows eligible Canadians to consolidate their debts. 

In a Proposal, you work with an LIT to create an offer to your creditors to pay a percentage of your debt, extend the time you have to pay, or both. The maximum term for a Consumer Proposal is five years. 

Who should consider a Consumer Proposal?

When you meet with an LIT they will assess your financial situation to determine if a Consumer Proposal is the right fit. You will also need to meet the eligibility requirements for a Proposal which include:

  • You are a resident of Canada
  • You are insolvent (can no longer pay your debts on time)
  • Have debt over $1,000 and not exceeding $250,000 (excluding your primary mortgage)

How does a Consumer Proposal work?

If you and your LIT decide a Consumer Proposal is the right debt help solution for you, your LIT will file your Proposal with the Office of the Superintendent of Bankruptcy

As soon as your Proposal is filed, you can stop making debt payments directly to your creditors. Any creditor lawsuits, wage garnishment, or collection phone calls will also stop. 

Your LIT will present your Proposal to your creditors, and if it is accepted, you have up to five years to repay your debts. If your Proposal isn’t accepted, you can update your offer and resubmit it, consider another debt solution, or declare Bankruptcy. 

What are your responsibilities in a Consumer Debt Proposal?

While your LIT will take the lead on most aspects of the Consumer Proposal, you also have responsibilities to fulfill, including: 

  • Providing your LIT with a list of assets and debts
  • Attending two counselling sessions
  • Advising your LIT in writing if your address changes
  • Assisting your LIT throughout the proposal process

How will a Consumer Proposal impact your credit score?

A Consumer Proposal will negatively affect your credit score. You will be given an R7 credit rating and this can make it more difficult and expensive to borrow money. A Consumer Proposal will stay on your credit report for up to six years. 

What’s the difference between a Consumer Proposal and Bankruptcy?

The main difference between a Consumer Proposal and Bankruptcy is that you get to keep more of your assets in a Proposal. In Bankruptcy, you are required to surrender non-exempt assets in an effort to repay your creditors. 

While a Consumer Proposal and Bankruptcy both provide debt relief, the goal of a Proposal is to reduce the total amount you owe and make your monthly debt payments more affordable. In Bankruptcy, the purpose is to eliminate your debts so you can get a fresh financial start. 

Alternative Debt Help Options

If you don’t qualify for a Consumer Proposal or if you and your LIT decide it’s not the right fit, there are other debt solutions available. 

Debt Consolidation Vancouver Island

The purpose of debt consolidation is to combine multiple debts into one monthly debt payment. There are several debt consolidation methods including consolidation loans, balance transfer credit cards, and a Consumer Proposal. 

Credit Counselling Vancouver Island

To improve your financial knowledge or learn new money skills, you might consider credit counselling. A credit counsellor can help you understand the root cause of your debt and recommend strategies to get out of debt.

Bankruptcy Vancouver Island

While Bankruptcy is typically viewed as a last resort for those with significant debt, it is designed to give those down on their luck a second chance. In Bankruptcy, non-exempt assets are surrendered and in exchange, you are released from many unsecured debts.

Debt Help is Available 

If you can no longer afford to repay all of the debt you owe, speak to a Licensed Insolvency Trustee about a Consumer Proposal on Vancouver Island. While debt can feel overwhelming and isolating, you can get through it with the help of an LIT. A Trustee has the specialized skills and experience to help you overcome any debt issue, no matter how significant. They are also the only professionals in Canada authorized to administer Consumer Proposals. 

You don’t have to navigate your debt alone. For a free, no-obligation consultation give us a call at 1-888-371-8900 or reach out through our online contact form and someone will get back to you. We Can Help.