One of the major benefits of a consumer proposal arrangement is that you have a lot of flexibility in crafting a repayment plan for your debts. While your creditors must accept the proposal, there are no ‘set rules’ on what you can and cannot do. Here is the story of how one couple solved a lot of issues by choosing a consumer proposal over bankruptcy. Steve had separated from his wife Krista about three years ago….
Consumer Proposal: Canada's #1 Alternative to Bankruptcy
A consumer proposal is the only debt settlement program administered by the federal government. It was introduced into the Bankruptcy & Insolvency Act as an alternative to bankruptcy for individuals who are struggling with debt payments but do not want to file bankruptcy.
A consumer proposal gives you protection from your creditors while you make a deal to repay a portion of your debts. You pay only what you can afford. Your creditors get more than they would in a bankruptcy. It’s a win-win for both you and your creditors.
The only way to file a Consumer Proposal is through a licensed Consumer Proposal Administrator. Your administrator is also a licensed bankruptcy trustee since both procedures are governed by the federal government through the Bankruptcy & Insolvency Act. If your counsellor is not a trustee, they cannot file a Consumer Proposal for you.
Read More About Consumer Proposals
Avoid Filing Bankruptcy – Compare Your Options
You don’t want to go bankrupt but are confused about your options. Each have different advantages and disadvantages and we recommend you compare each alternative carefully to see which might be best for you. In Canada, you may choose to consolidate your debts through a debt consolidation loan, refinance with a second mortgage, talk to a credit counsellor about a Debt Management Plan or settle your debts through a Consumer Proposal.
A Consumer Proposal Administrator is required by law to discuss all of these alternatives with you.
Compare Your Options
For a consumer proposal to be successful it must be acceptable to several parties. First you must be assured that you will be able to afford your monthly payments and that this is the best solution to eliminate your debts. Creditors are primarily looking at the total money they can expect to receive over the term of the proposal. They have certain ‘expectations’ and a successful plan takes these factors into consideration. Each person’s situation…
Your monthly consumer proposal payment includes all fees and taxes. You make one, all inclusive, payment, which is based on what you negotiate with your creditors. It is as simple as that. So how does the Trustee get paid? The government sets up a tariff allowing the Trustee or Consumer Proposal Administrator to be paid out of the funds collected for your creditors. You don’t pay the Trustee any extra payments, no up-front fees either. …