If you are having difficulties making your monthly payments, falling behind, or getting overwhelmed by your debts, but find the idea of potentially losing assets in a bankruptcy upsetting, you are not alone.
Or, perhaps you wish to pay back some of your debts but need a helping hand to get there.
A Consumer Proposal is an alternative to bankruptcy that thousands of individuals throughout Canada have used to help them pay back and eliminate their debts.
What Is a Consumer Proposal?
To understand proposals, you first must recognize that most people experiencing financial problems want to pay their debts, however, many are simply unable without additional help! A Consumer Proposal is a formal offer to creditors to settle outstanding debts and is a helpful tool to provide the additional assistance needed to take control of debt problems.
Generally, a Consumer Proposal is comprised of a monthly payment over a certain period of time no longer than 5 years. How we calculate the amount of that payment is determined by individuals’ circumstances, including your income and the assets you own.
Secured creditors are typically not affected by Consumer Proposals. What that means is, so long as you can afford to maintain the payments, you may be able to keep assets such as your car or house.
How Does a Consumer Proposal Work?
1. Meet With a Licensed Insolvency Trustee
You will first met with one of our insolvency experts and your options will be explained to you. If it is determined that a Consumer Proposal is the option best suited for your situation, then you will meet with a Licensed Insolvency Trustee. They will then review the process with you and help you to create and file the proposal.
2. File Your Proposal
Upon the filing of your Consumer Proposal, you can enjoy the peace of mind knowing you will be protected from most actions against you from creditors, including wage garnishments. The collection calls will cease, and you won’t accrue any more interest.
3. Complete the Obligations of Your Proposal
At this point, if your Consumer Proposal is accepted by your creditors, you need to fulfill the terms. Typically, this will include the monthly payments you agreed to with the Licensed Insolvency Trustee, as well as two mandatory counselling sessions. The object of these sessions will be to get you back on your feet, financially speaking. Budgeting, rebuilding your credit, and many other topics will be covered to ensure you are on the road to financial recovery.
4. Certificate of Full Performance
Once you have completed all the obligations laid out in your Consumer Proposal, the Licensed Insolvency Trustee will issue a certificate releasing you from the unsecured debts that were included in your proposal when you filed. You can then continue on your path to financial well-being.
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