Consumer Proposals in LangfordLearn how they work plus what to watch out for.Consumer Proposal Langford, BC - Alternatives & Important Things You Need to KnowWhat is a consumer proposal, and could it be the best option for my situation?If you are looking to consolidate your debts, one option available is to file a Consumer Proposal in Langford. This is a legal process governed by the Bankruptcy and Insolvency Act between yourself and your creditors to pay back a portion of the debt you owe. The amount of debt that you repay is mainly based on your income and what assets you own.A Consumer Proposal can only be arranged and administered by a licensed bankruptcy trustee and it costs approximately $1,500 to file. You pay an initial setup fee to begin, and then, if the arrangement is acceptable to your creditors, you then pay the balance to continue the process. The trustee you work with will additionally hold back 20% of your future payments as an administration fee. For the Consumer Proposal to be legally binding, your creditors who own the majority of your debt must agree to the proposed repayment plan. If they do, you then have to repay the agreed amount over a maximum repayment period of 5 years. The Advantages & Disadvantages of Filing a Consumer Proposal in BCConsumer Proposals contain certain advantages and disadvantages. These can include the following:AdvantagesIt can substantially reduce the amount of debt you are required to pay your creditorsIt can be an effective way of consolidating debt in Langford, BC if:You can't afford to repay all of what you oweYou have stable incomeYou have enough money in your budget to make monthly paymentsIt will pause active collection on student loan paymentsCan be a good option if:You don't qualify for a debt consolidation loanIf you have debts (like high government debt) that can't be included in a debt management programIt is one of the last ways to avoid bankruptcyDisadvantagesIt's not private. A proposal is filed as a permanent public record and is included on a searchable databaseIt costs more than going bankruptThe Consumer Proposal must be approved by a JudgeIt can be rejected by your creditors. If they reject it, you may have to offer them more money for toMissing more than 2 payments may mean that you need to file for bankruptcyNot all debts can be included (like secured loans)If you stopped being a student less than 7 years ago, your student loans can't be includedDepending on the type of assets you have, some might need to be soldIt may affect future employment opportunities, and the permanent record of your insolvency can put certain professional licenses at riskThere's Life Beyond Debt for Everyone"When debts became a problem, I felt very overwhelmed \u2013 like I could not see the end of the tunnel. Picking up the phone felt like lifting a 10 pound rock, but they were very cheerful on the other end of the line. I came in, discussed my situation in privacy, and instantly got relief knowing I was in good hands." - Delores, Actual ClientBeware of the Big Debt Rip-Off Consumer Proposals have become the latest method for a growing number of for-profit companies and their sales people to take advantage of vulnerable, unsuspecting consumers. Don't let this happen to you! Many debt relief companies are now claiming to offer Consumer Proposals as an easy way to get out of debt. There's a problem. Only a licensed bankruptcy trustee is allowed to file paperwork for a Consumer Proposal. The debt relief companies charge thousands in fees only to refer you to a bankruptcy trustee who then charges his or her own fees. How to Prevent Getting Ripped OffFollow the tips outlined below, but start by speaking to a member of Credit Counselling Canada (a national association of non-profit credit counselling organizations who don't work on commission). If a Consumer Proposal is a truly good option for you, one of their agencies will inform you and refer you to a reputable bankruptcy trustee for free. \tTalk to a non-profit Credit Counsellor about your situation first. They'll review your whole financial picture with you and help you look into and understand all of your options to resolve your debt problems and get your finances back on track.Never hand over money to anyone for Consumer Proposal services except a government licensed bankruptcy trustee. The law states that only they are allowed to offer and get paid for these services.Ask how the person helping you is compensated. Many people who will seek to advise you on your debts work on commission. Make sure the "solution" they are suggesting is in your best interest - not theirs. How Your Credit Will Be Impacted by a Consumer ProposalOnce you enter into a Consumer Proposal, a special notation is placed on your credit report in the public records section. Anyone who you allow to look at your credit report can see the public records section.Additionally, it is possible that your creditors will report a \u201c7\u201d rating on any debt included in the proposal. This "7" rating means that creditors are receiving your payments through a third party. In this instance the third party would be your trustee. When you send a payment to your trustee, they distribute the agreed upon dollar amounts to all of your creditors once all applicable fees have been paid.If you are making payments to secured creditors, like for a car loan, outside of your Consumer Proposal, those creditors will report on those debts separately. Creating and sticking to a realistic budget will make this easier.If you are able to maintain a good payment history on a secured debt while you're making your proposal payments, this can help you re-build credit afterwards. Contact Us for More Info About Filing for a Consumer Proposal in Langford, BCThere are quite a number of options between financial difficulty and bankruptcy. A Consumer Proposal might be one good option for some people, but it's not the best option for everyone. To find out what other options you have, speak with one of our professionally trained Credit Counsellors today, in person or over the phone. Our appointments are free, non-judgmental, and completely confidential.To ask us some questions or to make an appointment to speak with a Counsellor, phone us in Langford at 250-382-9559. You can also email or chat with us online right now.Office Serving Langford: Cook Medical Building, Suite 214 - 1175 Cook Street, Victoria, BC V8V 4A1Phone: 250-382-9559Related ResourcesHere are some related topics that may be useful for you. A lot of people are surprised to find out there are more debt consolidation options and alternatives than they knew about. Learn more about these.Find out how a Debt Management Program consolidates your payments, reduces your interest rates, and gets you out of debt.Learn the difference between a Consumer Proposal and Bankruptcy. Find out how they are different and how they are similar.Putting Your Interests FirstOur goal is to always put consumers first and look out for their best interests in everything we do. One way we do this is through transparency and accountability. We are held accountable to the most rigorous standards in our industry. Related LinksThe Office of the Superintendent of Bankruptcy for BCList of Licensed Bankruptcy TrusteesGlossary of Terms Used in InsolvencyCredit Counselling Society BC office locations The Credit Counselling Society is an award winning, non-profit credit counselling service provider in Langford, BC with 22 offices in communities across Canada.