If you are thinking about filing a consumer proposal there are 5 things you should know.
1. A Consumer Proposal is Court Approved
Once it is filed, collection actives against you stop and any wage garnishments stop (with limited exceptions such as child support). If you deal with your debt through other methods such as credit counselling or debt settlement, the creditors can still continue court actions.
2. A Bankruptcy Trustee Must Administer a Consumer Proposal
Consumer proposals are governed under the Bankruptcy and Insolvency Act. Only a licensed trustee can file your consumer proposal. There is no need to spend money dealing a debt consultants first, all they will do is charge you a lot of money and then send you to a trustee to file your consumer proposal.
3. The Fees are Included in the Consumer Proposal
Whatever monthly payment you make includes all of the fees, taxes and disbursements required to file the consumer proposal. All of these charges are regulated by the Bankruptcy and Insolvency Act.
4. A Consumer Proposal must Include all Unsecured Debt
You cannot pick and choose which creditors to include in your consumer proposal. It must include all of your unsecured debt. Your secured creditors (such as mortgage and car loan) are also notified, but if you are keeping the asset, you just continue with the regular payments.
5. A Consumer Proposal IS NOT Bankruptcy
Even though a consumer proposal is administered by a trustee, it is not bankruptcy. Unlike bankruptcy you are not penalized if your income increases and you don’t lose control of your assets.
A consumer proposal is an excellent way to get a fresh start. It allows you to settle your debts while keeping your assets and avoiding bankruptcy. Contact a consumer proposal administrator if you are considering making a proposal to your creditors.