A Consumer Proposal Can Help You Get Ahead of Your Debt
If you're struggling to keep up with your debt, a consumer proposal may be the solution for you. This type of debt relief can help you get ahead of your payments and avoid bankruptcy.
Advantages of consumer proposals include:
- You can keep your assets, including your home and car.
- Your payments will be lowered, making them more manageable.
- The consumer proposal will stop interest and collection calls from creditors.
- With few exceptions, you will be released from all unsecured debts.
If you are looking to file a consumer proposal, contact us today to schedule a free consultation. One of our Licensed Insolvency Trustees can help you determine if a consumer proposal is the right option for you.
Discuss Your Situation With A Licensed Insolvency Trustee Today
A consumer proposal is one of the legal debt relief options available to Canadians that can reduce unsecured debt you may have. The process involves a reduction of your debt through negotiations with your creditors. If accepted, similar to a debt consolidation loan, you will be left with a single monthly payment that satisfies most of your prior unsecured debts.
A proposal is a legally binding agreement between you and your creditors. It is the job of a Licensed Insolvency Trustee to administer the process and ensure everyone is treated fairly in the process.
The consumer proposal cost is included in the monthly payment you will pay and no money is paid to us before filing.
Reducing Your Monthly Payments With A Consumer Proposal
Consumer Proposals are arguably one of the most effective ways for consumers to reduce their debts by coming to terms with their creditors. Powell Associates Ltd. as a Licensed Insolvency Trustee will perform a thorough review of your financial situation and determine if a consumer proposal is an appropriate option for your circumstance.
They will also provide you with an idea of how much your debt could be reduced. It isn't uncommon for debts to be reduced by up to 80% depending on your circumstances.
Once filed, and accepted by creditors, you will make payments to your Licensed Insolvency Trustee who will distribute these funds to all of your unsecured creditors. It is important to maintain your consumer proposal payments in good standing.
What Debt Can Be Included In A Proposal?
Most unsecured debts can be included in a consumer proposal. This includes, but is not limited to:
- Credit Card Debt & Payday Loans
- Lines Of Credit & Personal Loan Debt
- Student Loan Debt
- Certain debts owing to the Canada Revenue Agency
Debts that cannot be included include, but are not limited to:
- Fines & Penalties imposed by a court,
- Child Support Arrears,
- Property Taxes, and
- Debts owing to secured creditors, in most cases.
Visit our blog article on what debts cannot be included in an insolvency proceeding.
Debt Advice. Tailored For You.
The Consumer Proposal Process
Meet with a Licensed Insolvency Trustee
You will first meet with one of our debt experts who will perform a debt assessment, and then outline and explain all of the debt relief solutions that are available to you in your circumstance. If you are both in agreement that a proposal is the best option you will be asked to provide documentation that will be used to prepare and file your consumer proposal paperwork. You will then meet a Licensed Insolvency Trustee to file your proposal.
Filing your consumer proposal
Once your proposal has been filed, your creditors will be prohibited from pursuing most collection & legal actions against you. This protection begins immediately and is particularly important if you have pending legal actions, any wage garnishments against you, or if you are receiving a significant volume of collection calls.
For a period of 45-60 days after filing your creditors will have the opportunity to accept, reject, or counter your proposal. While this sounds scary, rest assured it is not common that a creditor outright refuses a consumer proposal.
Begin making your monthly payments
Payments are typically for a duration of 60 months but can be paid off at any time without any penalty. These payments can be made as one monthly payment or broken down into bi-weekly or weekly payments. You will make these payments to your Licensed Insolvency Trustee who will distribute the money amongst your creditors.
You can pay off your proposal faster by increasing your monthly payments or by making a lump sum payment as you are able.
Attending financial & credit counselling
Mandated by the Bankruptcy & Insolvency Act, two financial & credit counselling sessions are required. These will be completed during the term of your proposal. These are typically 30-45 minutes in length each of individualized counselling as well as self-learn modules provided by the Federal Government.
Obtaining your Certificate Of Full Performance
Once you have paid the full amount agreed upon, and have completed your two financial counselling sessions you will be issued a Certificate Of Full Performance and officially released from your unsecured debts. The completion of your proposal will be reported to your credit report automatically.
How Powell Associates Ltd. Helps
Powell Associates Ltd. is a Licensed Insolvency Trustee. We are experienced, hands-on insolvency practitioners who understand the personal impacts of major financial stress.
Our consumer proposal services ensure you are treated fairly and with dignity.
- You won’t be stuck in an assembly line process.
- You will expect and receive prompt responses and resolution of issues from our supportive and experienced team.
- We will review your debt solution options, including filing a consumer proposal or personal bankruptcy.
- We help Canadians with overwhelming debt get fresh financial starts.
Once you file a consumer proposal, we deal directly with your creditors on your behalf. Your unsecured creditors are required to stop contacting you or continuing legal proceedings against you. Contact us for a free consultation.
Frequently Asked Questions
Filing a proposal requires that you be 'Insolvent'. The Bankruptcy & Insolvency Act defines an insolvent person as an individual who owes more than $1,000 and is unable to meet their debt obligations as they become due. You are also insolvent if the fair value of your assets and property is less than your total debts.
When you meet with a Licensed Insolvency Trustee from our office, they will help you understand if a consumer proposal is the proper option for your situation.
A consumer proposal is one of the most popular debt relief options that exists in Canada.
A consumer proposal allows you to avoid bankruptcy, retain your assets, and have a lesser credit rating impact compared to bankruptcy.
It can have you debt-free in a relatively short period of time and free up valuable cash flow to help achieve your goals such as paying off your secured debts (such as a car loan) faster or saving a rainy day fund.
While other debt-relief options exist, when eligible and suffering from major financial difficulties a proposal can be the best way out. You can also check out our blog on 10 ways to pay off debt faster.
We also wrote an article specifically answering 'Is a consumer proposal worth it?'.
Consumer proposals are rarely rejected, but if the creditor rejects your consumer proposal, you have the opportunity to go back to your creditors and offer them more money.
In the rare event your proposal is not accepted, you are not automatically forced into bankruptcy. Although it may be the only viable option remaining.
You may be asking yourself? Why would a consumer proposal be rejected? It is because they do not like the terms you originally offered in your proposal. The good thing is, you can always go back to your creditors and ask them to accept different terms.
There is no up-front cost to file a consumer proposal with our office.
Our fees are regulated by the Federal Government and are paid out of the money you offer to your creditors. For example, if you owed $30,000 and wanted to offer your creditors $12,000 ($200 per month over 5 years) the $200 monthly payment includes our fees.