Advantages Of A Consumer Proposal

• Legally binding between you and all your creditors
• Most wage garnishments will be stopped immediately once your proposal is filed
• Repay only a percentage of your debt
• One monthly payment over a period of no more than 5 years
• Harassing phone calls will stop
• Interest is frozen on your debts

What About Your Assets?

One of the main concerns about filing a consumer proposal is the risk of losing assets such as your house, vehicle, RRSPs. In a bankruptcy you will forfeit your tax return and certain assets such as RESPs and contributions made to your RRSPs within the past 12 months before filing. With consumer proposals you will keep your tax refund and other assets. Regardless of filing a consumer proposal, if payments are up to date with your mortgage and car loan you will be able to keep them.

Home

Filing a consumer proposal allows you to keep your house as long as your monthly mortgage payments are up to date. Unless you are behind on your mortgage payments, a mortgage lender is not able to proceed against your home. The terms of your mortgage legally cannot change because you have filed a consumer proposal.

Vehicle

Filing a consumer proposal allows you to also keep your vehicle as long as your monthly car payments are up to date.

What Can And Cannot Be Included

Generally consumer proposals cannot include the following debt:

• Mortgage loans
• Car loans
• Court ordered fines
• Child/spousal support payments
• Student loans (less than 7 years old)

Consumer proposal can include unsecured debt:

• Credit card debt
• Unsecured lines of credit
• Overdraft fees
• Personal loans
• Tax debt
• Student loans (more than 7 years old)
• Pay Day loans
• Income taxes

In a consumer proposal you can include ALL your other unsecured debt, with few exceptions. A percentage of the total debt will be distributed to all your creditors in a monthly payment. Any secured debt will not be a part of the consumer proposal and must be dealt with the secured creditor directly.

How A Consumer Proposal Works

Free Initial Consultation

An initial consultation will be held with a Licensed Insolvency Trustee who will review your financial situation thoroughly. Our licensed trustees will recommend what debt relief options is best for you. It is important to remember that every financial situation is different.

Are You Eligible

• Can you pay a percentage of your debts?
• Are your debts more than what you own?
• Are you able to make monthly payments?
• Is your debt between $1,000 and $250,000 (not including your mortgage)?

Cost Of A Consumer Proposal

In a consumer proposal you will be required to make a fixed monthly payment over a period of no more than 5 years. Our trustee will review your finances and calculate the potential amount that you will be required to pay monthly. There are no additional fees.

Filing A Consumer Proposal

The trustee has reviewed your finances and determined the best monthly payment, now the required forms must be completed to start the process. The consumer proposal will be electronically filed with the Office of the Superintendent of Bankruptcy. You will then be assigned an estate number to your file. This will enable protection against creditors. Once the proposal has been filed your debts will be frozen stopping any interest from accruing and most wage garnishments will be lifted. Any communication from the creditors will now be redirected to the trustee.

Creditors Voting Process

Each of your creditors will have the opportunity to vote for or against the proposal (which is the payment per month). Creditors have 45 days to make a decision to accept or reject the proposal.

A consumer proposal is accepted if a majority of creditors vote for it. Even those creditors that voted against are bound by the decision of the majority.

If a creditor does not agree to the terms of the consumer proposal, that creditor can request a meeting. The trustee will negotiate with the creditors to come to an agreement that is suitable for both you and the creditors.

Creditors generally prefer consumer proposals over bankruptcy. A consumer proposal will allow creditors to maximize realization versus bankruptcy.

Credit Counselling

There are 2 credit counselling sessions that are mandatory when filing a consumer proposal. You will meet with a credit counsellor that will help with your budgeting and money management skills which mean help securing your financial future.

Missed Payments

During the length of your proposal if you miss 3 payments your proposal will automatically fail being ‘deemed annulled’. Your creditors can then take action against you and the debt owed to them before the proposal was filed.

Completing Your Consumer Proposal

Once you have completed your monthly payments, you will receive a Certificate of Full Performance.