Consumer Proposal Surrey, BC – Other Options & Stuff You Need to Know
What is a consumer proposal, and could it be the best option for my situation?
Filing a Consumer Proposal in Surrey 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
There are definitely advantages and disadvantages to filing a Consumer Proposal. Here are some that are important to be aware of:
Advantages
- It can substantially reduce the amount of debt you are required to pay your creditors
- It can be an effective way of consolidating debt in Surrey, 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:
- You don’t qualify for a debt consolidation loan
- If you have debts (like high government debt) that can’t be included in a debt management program
- 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
Beware of the Big Debt Rip-Off
Consumer Proposals have unfortunately become the latest way for an increasing number of debt relief companies and their sales people to take advantage of vulnerable, unsuspecting consumers. Make sure you don’t let this happen to you! Many of these companies are now claiming to offer Consumer Proposals as an effective way to deal with debt. But there’s a problem. In Canada, only a licensed bankruptcy trustee is legally allowed to deal with Consumer Proposals. These debt relief agencies charge thousands of dollars in fees but then refer you to a bankruptcy trustee who then charges his or her own legitimate fees.
How to Keep from Getting Ripped Off
Follow 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.
Talk with a Non-Profit Credit Counsellor
Only Pay a Trustee for Consumer Proposal Services
Be Careful with Commission Based Debt Consultants
Discover Your Options
A Visual Overview of Possible Options
Here are some options that may be available to you based on the information you have provided about your financial situation. The most likely options are in green, less likely in yellow, and least likely in red. This is only intended to provide you with a general idea of the options that may be available to you. A credit counsellor will need to go over your information in much more detail to make a more precise determination.0
Option
Do a Deeper Dive to Uncover More Options
It looks as though your situation requires more in-depth analysis from a trained credit counsellor. They can help you optimize your budget, explore options, and create a plan to get back on track.
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Option
Self-Managed Solution
After thoroughly exploring your options with a credit counsellor, they can help you put together a plan to get out of debt in a reasonable amount of time. You can then implement this plan on your own.
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Option
Debt Consolidation Loan
Based on the information you've provided, it appears as though this could be a possibility if your credit score is strong enough.
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Option
Debt Management Program
It appears as though this may be an option for you. A Debt Management Program eliminates or drastically reduces interest and consolidates all payments into one.
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Option
Consumer Proposal
This may be an option for you to consider. It's a legal process that consolidates all payments into one. Talk to a credit counsellor about this and see if it makes sense for your situation.
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Option
Bankruptcy
Based on the information you've entered, it appears as though bankruptcy may be an option to resolve your financial challenges. You should speak with a credit counsellor about this and make sure you've exhausted all other options first.
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Option
Orderly Payment of Debts
Based on what you've entered, it looks as though an Orderly Payment of Debts (OPD) program may be an option for you. To find out if this would make sense for your situation, you should speak with a credit counsellor.
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Option
Voluntary Deposit
Based on the information you've provided, it looks as though a voluntary deposit program may be an option to address your debt situation.
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Bonus Option
Online Workshops
Learn how to improve your financial situation, create a budget, make your dollars stretch further, and get out of debt with one of our many helpful online workshops we call webinars.
More Specifics on How We Can Help You
Get Help Today
Give us a call to speak with one of our credit counsellors at 1-888-527-8999, or if you'd like us to contact you instead, please fill out the form below.How a Consumer Proposal Can Impact Your Credit
When you make payments on a Consumer Proposal, there is a note on your credit report in the public records section that you have filed a proposal. Anyone who has your consent to see your credit report will see the public records section as well.
In addition, your creditors may report a “7” rating on the debts included in the proposal. This means that they are receiving payments through a third party. The third party is your trustee. When you make a payment to your trustee, they disburse the agreed upon amount to each of your creditors after all applicable fees have been paid.
If you are paying secured creditors, like those who hold your car loan, outside of your Consumer Proposal, those creditors will report your payments on those debts separately. Creating and maintaining a realistic budget will make it easier to keep these debts paid up to date.
If you are able to show a good payment pattern on a secured debt while you’re making all of your proposal payments, you’ll be that much further ahead afterwards when you want to re-build your credit.
There 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 Surrey at 604-527-8999. You can also email or chat with us online right now.
Surrey Office: Suite 101 – 15399 102A Avenue, Surrey, BC V3R 7K1
Phone: 604-527-8999
Related Topics
You may find some of these articles to be helpful.
Debt Consolidation Options & Alternatives
How Does a Debt Management Program Work?
Consumer Proposals Versus Bankruptcy - The Differences
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.
Related Links
- The Office of the Superintendent of Bankruptcy for BC
- List of Bankruptcy Trustees
- Insolvency Glossary
- Credit Counselling Society BC office locations
The Credit Counselling Society is an award winning, non-profit credit counselling service provider in Surrey, BC with
Our Surrey office also provides consumer proposal options and info in Delta, New Westminster, Coquitlam, Langley, Maple Ridge, Guildford, Whalley, Fleetwood, Newton, Cloverdale, South Surrey, and White Rock.