Why Choose a Consumer Proposal?

Consumer proposals are one of the most common methods used by Canadians to consolidate their debt, outside of a consolidation loan. Consumer proposal is a federally legislated debt repayment program that will see all of your debt combined into one payment and can often reduce the amount that you have to pay back. It’s one of the most popular repayment methods because of the fact that it is federally regulated by the Bankruptcy & Insolvency Act. Now don’t be scared by that statement. In no way are you filing for bankruptcy when you file a consumer proposal. They are two completely different repayment proposals.

Other than Bankruptcy no other program in Canada has as high of a success rate and Consumer proposals can handle almost any type of account. Loans, credit cards, payday loans, lines of credit, Canada Revenue Agency, they can all be included. You can protect yourself from wage garnishments, collection activity, judgments, you name it. A consumer proposal can take the stress away.

Want to know what your payment would be in a consumer proposal? Use our online calculator by clicking Here

What happens in a Consumer Proposal?

Great question. Consumer proposals can often be confusing and seem scary but the reality is, they’re pretty straight forward when you know what happens. First, you need to contact a licensed insolvency trustee to file a proposal. Don’t get fooled by other institutions that claim they can file it or help you through it. They do nothing more than collect documents and pass you onto a licensed insolvency trustee, after charging you extremely high retainers of course. You should never pay an upfront fee to file a consumer proposal.

Once the proposal has been signed with a licensed insolvency trustee they will then file the proposal with the superintendents office and send it out to your creditors. Once your creditors have the proposal they are given 45 calendar days to review and respond to the proposal. Typically there are three responses from your creditors. One, they accept the proposal and everything moves along as planned. Two, they decline the proposal (not very likely) and finally, they can decline the proposal and offer a counter offer. In any case, a proposal will pass if you can get 50% of the dollars owed to accept plus one dollar. Essentially making it a majority rules situation. You can run into a situation where some creditors decline but are forced to go along with it if the majority of the votes were a yes.

Once the proposal has passed you have 60 months (5 years) or less to complete your payments at which time the proposal is deemed completed.

Want to know what your payment would be in a consumer proposal. Use our online calculator by clicking Here

What is the success rate of a Consumer Proposal?

One word, HIGH. Outside of Bankruptcy there is no other debt repayment program that can match the success rate of a consumer proposal. According to Stats Can. a staggering 98% of consumer proposals are accepted leaving only 2% that are not successful. This is one of the biggest factors for consumers when they are contemplating their options. Simply put, it’s very rare that a consumer proposal is declined.

Want to know what your payment would be in a consumer proposal. Use our online calculator by clicking Here

Who can offer a Consumer Proposal?

Ultimately, as stated above, the only professionals that have the ability to file a consumer proposal are Licensed Insolvency Trustees. Anyone other than a Licensed Insolvency Trustees cannot file a proposal for you. There are plenty of institutions that state they will help you through the process of a proposal but they often charge large upfront fees which are not necessary when filing a proposal. These institutions try to justify their retainers but at the end of the day they are simply charging large upfront fees to collect documents and pass then onto a Licensed Insolvency Trustees.

Not sure if the institution you’re dealing with is a Licensed Insolvency Trustee? Simply ask them! If they’re not, then you’re paying unnecessary fees to have someone collect documents and contact a trustee for you. The rule of thumb is if you’re asked to pay an upfront fee, they’re not a Licensed Insolvency Trustee and you’re paying a fee you shouldn’t be paying.

Want to know what your payment would be in a consumer proposal. Use our online calculator by clicking Here

Do you have to pay an upfront fee for a Consumer Proposal?

No, a Licensed Insolvency Trustee will never charge you an upfront fee to file a consumer proposal. If the institution you are working with asks you to pay a large upfront fee they are not a Licensed Insolvency Trustee. Stop working with them and contact a local Licensed Insolvency Trustee.

Want to know what your payment would be in a consumer proposal. Use our online calculator by clicking Here

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