DMP or Consumer Proposal? Compare The Payments.



Two very popular debt reduction programs available to Canadians include a debt management plan and a consumer proposal. While both involve negotiation with your creditors with the assistance of a third party (a trustee in the case of a consumer proposal and an accredited credit counselling agency for a debt management plan), a consumer proposal can provide more relief in terms of lower monthly payments in most situations. To help you compare the potential cost…


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Consumer Proposal: A Great Way to Stop Collection Calls



Consumer Proposals

A consumer proposal is a legal process administered by a Licensed Insolvency Trustee. It is a procedure available under the Bankruptcy and Insolvency Act which mean that, just like bankruptcy, a proposal provides legal protection from creditor actions. That means that a proposal is an effective way to stop collection calls and eliminate the debt that is causing those calls. The legal protection is called a ‘Stay of Proceedings’. This stay is effective as soon…


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Five Tips For Negotiating With Creditors



Credit is when someone loans you money with the expectation that you’ll pay it back, and with interest. That’s an agreement that you make with your creditor when you sign up. The end goal for a creditor is to get paid. For the most part they’ll take full or partial payments depending on your situation. You can negotiate with your creditors, but it’s important to know the proper steps to do so. 1. Communication Communicate your…


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What Is The Debt Limit In A Consumer Proposal?



A consumer proposal is a debt relief solution under the Bankruptcy & Insolvency Act available to individuals in Canada as an alternative to bankruptcy. There are, however, requirements and limits as to who is eligible to file a consumer proposal. First, a consumer proposal only applies to an individual, not a corporation. If you are a sole proprietor or unincorporated business, you can still file a one as long as your total debts are within…


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Consumer Proposals are a part of the Bankruptcy & Insolvency Act



Consumer Proposals

Do you need help with your debts but don’t want to file for bankruptcy? Have you considered a consumer proposal? It’s a good option for those with home equity or other assets they wish to protect. Moreover, it allows you to settle your debts for a fraction of what you owe while stopping interest and allowing you to pay in one convenient, monthly payment. Better yet, a consumer proposal offers immediate protection from your creditors…


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What is the Voting Period in a Consumer Proposal?



Consumer Proposals

If you find that you are experiencing financial difficulty and you are struggling to pay your debts in a reasonable period of time but can afford to pay a consumer proposal is an option. In a proposal you make an offer to repay a portion of your debts and your creditors vote to accept or reject that offer. First you will meet with a licensed insolvency trustee to sign your documents. The trustee will file your…


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What Happens If My Creditors Reject My Consumer Proposal?



Consumer Proposals

Consumer proposals are rarely rejected, however, if your creditors do reject your consumer proposal, all hope is not lost. When you file a consumer proposal, your creditors have 45 days to vote on whether they will accept the terms that you offered (this includes terms such as the payment amount and the length of the proposal) or reject those terms. Consumer proposals are accepted or rejected based on votes by your creditors. The voting system operates under…


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How Are Canadians Getting Out of Debt



Consumer Proposals

While the rate varies by province and year, more than 4 in every 1,000 Canadians get out of debt by filing insolvency each year in Canada. In 2013 alone, almost 123,000 people utilized the protection provided in the Bankruptcy & Insolvency Act to eliminate their debt and gain a new start. For many however, bankruptcy is not the final solution. In 2013 42% of insolvent debtors chose a consumer proposal as their debt relief solution….


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Will my consumer proposal affect my spouse?



Consumer Proposals

Your consumer proposal deals with your debts. It does not deal with debts that are not your debts. If you have a debt that is joint with your spouse (such as a line of credit that is in both of your names), your proposal deals with your debt. Once the proposal is accepted, the bank will not pursue you for any money. However, if your spouse did not file a proposal, they remain liable for…


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Consumer Proposal and Taxes



Consumer Proposals

Can you include money owing to Canada Revenue Agency in your consumer proposal? The simple answer is yes but there are some considerations. Tax Debts Are Just Like Any Other Unsecured Debt Just like credit card debt and unsecured lines of credit, tax debts, personal income tax and HST, are unsecured debts and subject to bankruptcy and consumer proposals. When I tell people this, often I am asked how I know because they thought income…


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