How Consumer Proposals Work

Build a 5-Year Debt Repayment Plan



If you find yourself only able to make the minimum payments on your credit cards or you’re using one loan to pay off another, it may be time to take action on your debt. The good news is you can build a 5-year debt repayment plan by filing a consumer proposal. We’ve detailed below exactly what you need to be doing for the next 5 years to accomplish your debt repayment goal. Make your debt-free…


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Consumer Proposal: 5 Things to Know



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…


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Negotiating A Successful Consumer Proposal



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…


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4 Steps to a Home Run Consumer Proposal



If you’re considering a consumer proposal as a solution to an overwhelming debt problem, you want to make it a home run. You undoubtedly want the proposal to be accepted by your creditors, and to position yourself for a sound financial future. Here are my four key steps to a successful consumer proposal: 1. The Preparation Before all else, meet with a Licensed Insolvency Trustee for help. A Licensed Insolvency Trustee is the only person…


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Consumer Proposal: A Great Way to Stop Collection Calls



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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Are All My Debts Included In A Consumer Proposal?



When you file a consumer proposal in Canada, you should always meet with a Licensed Insolvency Trustee (LIT). LIT’s are licensed by the federal government to act as administrators of consumer proposals and bankruptcies. They can properly assess your situation and let you know how each of your debts are treated in a consumer proposal. This article will explain which debts can be included in a consumer proposal and any limitations on what debts can…


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What Happens When I File A Consumer Proposal?



A consumer proposal allows a person settle all their unsecured debts with their creditors for a fraction of what they owe. Often, settlements are for a third of the total debt owed and payment terms can extend to 60 months. It’s common to see a $30,000 debt with monthly payments of $600 or more to service, become a monthly payment of less than $200 to eliminate the debt through a proposal. It’s no surprise that…


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Consumer Proposal Annulment A Law, Not A Policy



A consumer proposal is a legally binding agreement between you and your creditors to settle your debt. Typically, the payments are scheduled as a monthly payment over a certain period of months. But what happens if you stop making payments? Your consumer proposal is annulled. The Bankruptcy and Insolvency Act is quite clear on what happens when payments are missed.  Section  66.31(1) states: …A consumer proposal is deemed to be annulled on (a) in the…


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How Is Cosigned Debt Treated In A Consumer Proposal?



A common concern among my clients is how their cosigned debts will be treated in a consumer proposal. There’s a misconception that each person is responsible for half of the debt, when the reality is that each person is responsible for the full amount of the debt. That doesn’t mean that the lender or creditor can collect double the amount owed. It just means that the lender can collect the full amount from either party. Therefore…


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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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