All You Need to Know About a Campbell River Consumer Proposal

If you owe money, you may be surprised to learn that you have more than one option when it comes to getting debt relief. A Consumer Proposal is one of the most popular options. This powerful tool is an attractive alternative to Bankruptcy while still providing protection from debt collectors and freezing interest on your debt.

What is a Consumer Proposal?

A Consumer Proposal is a Government approved debt relief program that allows you to pay back a portion of the total debt you owe to creditors. Working with a Licensed Insolvency Trustee (LIT), you can negotiate a legally binding agreement with your creditors to pay back part or all of your unsecured debt. In other words, you are able to make a deal.

If you’re in Campbell River or nearby and struggling with debt, keep reading to find out if a Consumer Proposal might be the right solution for you.

Will I qualify for a Consumer Proposal?

There are 2 requirements to qualify. You can apply if you meet both conditions:

1. You live or do business in Canada; and
2. Your debt is between $1,000 and $250,000, not including your mortgage on your main place of residence.

Even though there are only 2 requirements to apply, whether a Consumer Proposal is the right option for you depends on your personal financial situation. The easiest way to find out what’s best for you is to book a free and confidential consultation with one of our Licensed Insolvency Trustees in Campbell River.

How do I apply?

You must apply through a Licensed Insolvency Trustee (LIT). The LIT will file a Campbell River Consumer Proposal for you with the Government and submit it to your creditors.

As soon as your Consumer Proposal is registered with the Federal Government, you can stop making payments directly to your unsecured debt and your creditors must stop collecting from you. Your creditors will then have 45 days to accept or reject your proposal.

What are my responsibilities if my Consumer Proposal is accepted?

If your Consumer Proposal is accepted by your creditors, you will need to do several things in order to complete your Proposal. These include:

• Making the payments as scheduled;
• Attending 2 counselling sessions with your LIT;
• Letting your LIT know if your address or any other personal information changes; and
• Generally participating in the proposal process with your LIT.

This may seem like a lot, but don’t worry. At Chase & Associates, we specialize in guiding you through this process and making it as stress free as possible. We will be there to help you every step of the way.

What happens if my Consumer Proposal gets rejected?

In general, Consumer Proposals are regularly approved when first filed. If it happens to get rejected, you have several options on how to proceed:

• You can make changes to the proposal and resubmit it;
• You can withdraw it and continue on as you were before;
• You can consider other options for solving your financial problems; or
• You can declare Bankruptcy.

In this situation, your Licensed Insolvency Trustee will advise you about the best option.

What are the filing costs?

One of the main advantages of a Consumer Proposal is that it can significantly reduce the amount of debt you have to pay to your creditors. On average, most individuals we help end up paying back 15-25% of their total unsecured debt.

The cost for filing it is included in the scheduled monthly payments and is set by the Federal Government.

Overall, what that means is that you will have one manageable monthly payment that covers your unsecured debt and the cost of your Trustee.

How long does a Campbell River Consumer Proposal last?

The repayment period typically lasts 4-5 years. But you have the flexibility to finish your payments as soon as possible to allow for a better credit rating. The maximum repayment length possible is just under 5 years. Often we see people make a lump sum payment or extra payments in order to finish sooner than scheduled.

Once you complete the conditions of your Consumer Proposal, you will receive a Certificate of Full Performance. This means that your remaining unsecured debts will be legally forgiven. At this point, your credit record will automatically update.

What types of debts are included (and what is NOT included)?

Most “unsecured” debts can be included. These are:

• Credit card debt
• Lines of credit
• Overdrafts
• Canada Revenue Agency income tax debt
• Canada Revenue Agency GST/HST debt
• Student loans
• Payday loans
• Installment loans
• Shortfall from a mortgage foreclosure

Secured debt, like car loans, are generally not included.

What are the benefits of a Consumer Proposal?

Overall, a Consumer Proposal is a less intrusive process than Bankruptcy and allows you to keep more control of your finances. Some of the main benefits include:

• Zero interest on unsecured debt
• Protection from debt collectors
• It will pause active collection on student loan payments
• It can help you avoid Bankruptcy
• It has less of an effect on your credit score and will only stay on your record for 3 years after completion.

Find Out if a Consumer Proposal is the Right Choice for You

Consumer Proposals most often result in a win-win situation. You gain the debt help you were looking for and the creditors are happy because they recover some of their money.

Please don’t hesitate to reach out to us for a free consultation to discuss your specific financial situation and how a Consumer Proposal might help. This life-changing debt relief is available for YOU. Contact our office to arrange a free appointment by phone, online, or in person.