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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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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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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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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What Happens If My Creditors Reject My Consumer Proposal?



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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Do Banks Like Consumer Proposals?



To understand how creditors, like your bank, view a consumer proposal, it’s important to understand exactly what a consumer proposal is and how it affects the money you owe them. Here’s the quick version: A consumer proposal is a federally regulated process to settle your debts for less than what you owe.  It will not change secured debts like a mortgage or car loan.  If you want to keep your house or car, you have…


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Filing A Lump Sum Consumer Proposal Can Be A Good Option



Consumer proposals can be offered in many ways.  The conventional way is to offer payments over a period of time, up to five years.  However, there’s little to restrict a bit of creativity in a consumer proposal. In fact, proposals to creditors can be offered in as little as one payment. Filing a consumer proposal as a lump sum can be a good option for someone who has access to some cash but not enough to…


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Consumer Proposal Vs. Division I Proposal To Creditors



What is a consumer proposal? A proposal to creditors is a deal you negotiate with the people you owe money to in order to repay a portion (or perhaps all) of what you owe.  If you like legal terms, a proposal is an “arrangement” to “settle” your debts for less than their full amount. You might be asking yourself, “Why would anyone accept a deal for me to repay less than what I owe?”  That’s…


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My Consumer Proposal Was Annulled: Now What?



  Here’s the bad news: if your consumer proposal is annulled, you’ve lost any protection from your creditors.  Their rights are re-instated and they can pursue you for your debts again. Here’s the good news: other than doing nothing, you have five options to still get relief from your debts and a fresh start. Don’t Panic.  You Still Have Options. 1. Revive the Proposal – If you can meet with your trustee within 30 days of the proposal…


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Will There Be a Meeting of Creditors During My Proposal?



When talking with clients, I often get asked, “Do I have to meet with my creditors?”; coupled with a look of stress or fear. Let me explain the basics and then provide you with some practical, real life scenarios. The Basics The Bankruptcy and Insolvency Act tells us that the Administrator of the proposal (that’s your trustee) is to call a meeting of creditors if: directed to do so by the Official Receiver (the government)…


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