Consumer Proposals in Prince George
Learn how they work plus what to watch out for.

Consumer Proposal Prince George, BC – Straight Facts and Other Options

What is a consumer proposal, and is it my best option?

Filing a Consumer Proposal in Prince George is a debt repayment option that allows some people to consolidate their debts. It is a legal process between you and your creditors to repay a portion of what you owe, and it is governed by the Bankruptcy and Insolvency Act. To a large extent, the amount of debt you repay to your creditors is based on your income and what you own.

A Consumer Proposal can only be setup by a bankruptcy trustee and costs around $1,500. You’ll pay an initial setup fee, and if it is accepted by your creditors, you will pay the balance to proceed. In addition, the trustee will keep 20% of your future payments as your Consumer Proposal administration fee. For the proposal to be legally binding, the creditors who own the majority of your debt must agree to the arrangement. If they do, then you will be required to repay the agreed upon amount over a maximum term of 5 years.

The Advantages & Disadvantages of Filing a Consumer Proposal in BC

Consumer Proposals contain certain advantages and disadvantages. These can include the following:

Advantages

  • It can reduce the amount of debt you need to repay your creditors by a considerable amount
  • It can be a helpful debt consolidation method in Prince George, BC if:
    • You can’t afford to repay all of what you owe
    • You have stable income
    • You have enough money in your budget to make monthly payments
  • It will pause active collection on student loan payments
  • Can be a good option if:
  • It is one of the last ways to avoid bankruptcy

Disadvantages

  • It’s not a private matter. A Consumer Proposal is filed as a permanent public record and is included on a searchable database
  • It costs more than filing for bankruptcy
  • The Court must approve it
  • Creditors can choose to reject the proposal. If they do, you may need to offer them additional funds to convince them to proceed
  • You might need to sell some of your assets (such as a vehicle, your home, or investments)
  • You may need to file for bankruptcy if you miss more than 2 payments
  • Secured debts cannot be put into a proposal
  • Student loans less than 7 years old can’t be included
  • It can put certain professional licenses at risk, and the permanent record of your insolvency may also affect some future employment opportunities

There’s Life Beyond Debt for Everyone

“When debts became a problem, I felt very overwhelmed – 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 Client

Watch Out for the Big Debt Rip-Off

Consumer Proposals have become the newest way for a growing number of companies and their sales people to take advantage of unsuspecting, vulnerable Canadians. Don’t let this happen to you! A lot of companies offering debt relief are now claiming to provide Consumer Proposals as a great way of getting out of debt. But there’s a problem. Only a government licensed bankruptcy trustee is permitted to file paperwork for a Consumer Proposal. These debt relief companies bill people for thousands in fees only to refer them to a bankruptcy trustee who then charges his or her own fees.

How to Prevent Getting Ripped Off

Follow the three tips below plus start by speaking with a member of Credit Counselling Canada (an association of non-profit credit counselling agencies who do not work on commission). If a Consumer Proposal is truly one of your best options, one of their agencies can let you know and refer you to a reputable bankruptcy trustee for free.

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Speak to a Non-Profit Credit Counsellor

Talk 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.
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Only Pay a Trustee for a Consumer Proposal

Never pay money to anyone for Consumer Proposal services except a licensed bankruptcy trustee. According to the law, only a licensed trustee is allowed to do the work and charge for Consumer Proposals.
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Watch Out for Consultants on Commission

Find out how the person helping you is compensated. A lot of people who want to advise you on your debts work on commission. Make certain that the “solution” they are recommending is in your best interest – not theirs.

Find Out What Options May Be Available to You
by Answering 9 Simple Questions

Just answer these easy, multiple-choice questions to get a look at your potential options. Within a few minutes, you'll be looking at summarized options and results that apply specifically to your situation.

Discover Your Options

1. How would you describe your financial situation? Please move the slider along the scale to reflect approximately where you feel you're at.
I can cover all my expenses each month, plus have the ability to save.
 
I can cover my monthly expenses, but I need to borrow, work extra, etc.
 
I can no longer cover all my expenses every month.
 
2. Which of the following best describes you?
3. How stressed do you feel about your debt?
Not stressed
 
Somewhat stressed
 
Very stressed
 

How a Consumer Proposal Impacts Credit

Once 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 “7” 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 monthly payments to secured creditors (like paying for a vehicle loan) outside of your Consumer Proposal, those debts will be reported separately by the creditors that you are paying. If you can create and stick with a realistic budget, then it should make this easier.

If you are able to keep up a good payment history on any secured debts while you are paying off your proposal, this can assist you in re-building your credit more quickly afterwards.

Contact Us for More Info About Filing for a Consumer Proposal in Prince George, BC

Between financial difficulty and bankruptcy there can be many options. While a consumer proposal may be a good option for some, it isn’t the best option for everyone. To find out what options you have, call one of our professionally certified Credit Counsellors today. You can speak with a Counsellor in person or over the phone. Appointments with them are free, non-judgmental, and completely confidential.

For more information or to speak with a Counsellor, contact us in Prince George at 1-888-527-8999. You can also email or chat with us online right now.

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Putting Your Interests First

Our 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.

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