Consumer Proposals in Prince RupertWhat you need to know and watch out for.Consumer Proposal Prince Rupert, BC - Alternatives & Important Things You Need to KnowWhat is a consumer proposal, and is it the best option for me?One option to consolidate your debts is to file a Consumer Proposal in Prince Rupert. It is a legal process under the Bankruptcy and Insolvency Act between you and your creditors to repay part of what you owe. The amount you repay is largely based upon your income and what 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. Advantages and Disadvantages of Filing for a Consumer ProposalConsumer Proposals contain certain advantages and disadvantages. These can include the following:AdvantagesIt can reduce the amount of debt you need to repay your creditors by a considerable amountIt can be a helpful debt consolidation method in Prince Rupert, BC if:You cannot afford to pay back all the debt you oweYou have steady incomeYour budget has enough money in it for you to make monthly paymentsHas the potential to be a good option if:You aren't able to qualify for a consolidation loanIf you have debts (like high government debt) which need to remain outside of a debt management programWill put active collection of student loan payments on holdIt is one of the final ways of avoiding 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 ClientWatch 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 OffFollow the three suggestions below and begin by talking to an accredited member of Credit Counselling Canada (Canada's national association of not-for-profit credit counselling organizations who never pay their employees commission). If the agency you speak to believes that a Consumer Proposal would truly be one of your best options, they'll let you know and refer you to a reputable bankruptcy trustee in your area for free. \tSpeak with a non-profit Credit Counsellor about your financial situation first. They will be able to review your situation with you and help you explore and understand all your options to deal with your debt.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.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. 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 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 Information About Filing for a Consumer Proposal in Prince Rupert, BCWhen you're experiencing financial difficulty, you may think that bankruptcy is your only option. There are a lot of options to deal with debt in Canada. A Consumer Proposal isn't the right option for everyone, but it can be a good option for some people. To find out what options might be right for you, call one of our accredited, professional Debt Counsellors today. Our appointments are either in person or over the phone. They don't cost you anything, are non-judgmental, and are completely confidential.For more information or to arrange an appointment to speak with one of our Counsellors, contact us in Prince Rupert at 1-888-527-8999. You can also email or chat with us online right now.Related TopicsHere are some related topics that may be useful for you. There are more alternative debt consolidation options and services available than most people are aware of. Find the option that's right for you.Discover how it can consolidated debt, reduce or eliminate interest rates, and help get someone 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 Bankruptcy TrusteesInsolvency GlossaryCredit Counselling Society BC office locations The Credit Counselling Society is a leading, non-profit credit counselling service provider in Prince Rupert, BC with 22 locations across Canada.