Consumer Proposal Handbook to Affordable Debt Repayment
Affording your debt is simple with our Consumer Proposal Handbook
The stress can be overwhelming when you can not afford to pay all your bills and your debt is weighing heavily on your ability to live and enjoy life. A consumer proposal could be the answer! It is a simple and very affordable solution to all types of debt.
What is a consumer proposal?
A consumer proposal is a legal arrangement between yourself and your creditors. The arrangement is controlled by the Bankruptcy and Insolvency Act of Canada, and offers the ability to reduce your unsecured debt by up to 80%. Creditors and collection agencies including credit card companies, unsecured lines of credit, Canada Revenue Agency, financial lenders, and pay-day loans companies, can all be included in your proposal.
The law requires that you file a consumer proposal with a LIT – Licensed Insolvency Trustee, they will facilitate the creation of your proposal and manage the creditors’ response to your proposal. The creditors have only 45 days from the date that the proposal is filed with the Superintendent of Bankruptcy to accept or reject your proposal. Most often creditors accept proposals as written, but occasionally the creditor requests a meeting to review the situation and ultimately they can request an increase in the debtors repayment commitment if they believe you can afford to pay more. In the end, a proposal needs to be agreed to by both parties.
Upon successfully renegotiating your debt, you will have up to 5 years to repay the reduced amount, no interest can be charged, all collections will cease, you will have one low fixed payment that suits your income.
Consumer Proposal Handbook Facts
- Maximum debt required – $1000.00
- Maximum Time to fulfill obligations – 60 months
- Assets Protected – Yes
- Maximum debt for Division II proposal – $250,000.
- Maximum debt for Division I proposal – Unlimited
- Married Couples – You can apply with or without your spouse
- Employment – Regular income is required to support a consumer proposal
- Credit Report – Consumer proposals will impact your credit score and credit report
- Secured debt – Mortgages and secured debt are not included in consumer proposals
- Missing a proposal payment – You can defer 2 repayments during the cycle of a proposal
- No cost- The Licensed Insolvency Trustee does not charge you directly for the proposal, they are paid through the proceeds of the proposal.
Although there are other debt solutions available through Licensed Insolvency Trustees, and credit counselling agencies, the consumer proposal is the preferred and considered the most effective tool available for financial wellness.
Lets chat about your individual situation and determine how best we can help you achieve your best financial outcome.