Consumer Proposals in Barrie

Learn how they work plus what to watch out for.

Consumer Proposal Barrie, Ontario – Alternatives & Important Things You Need to Know

What 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 Barrie. 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 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 Ontario

There are definitely advantages and disadvantages to filing a Consumer Proposal. Here are some that are important to be aware of:

Advantages

It can significantly reduce the amount of debt you have to repay your creditors
It can be an effective method of debt consolidation in Barrie, Ontario 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 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.

Talk to a Not-for-Profit Credit Counsellor

Speak to an accredited, non-profit Credit Counsellor about your financial situation first. They will go over your whole situation with you and take the time to help you explore and understand all your options to resolve your debt problems.

Don't Pay Anyone But a Bankruptcy Trustee

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.

Be Careful with Commission Based Debt Consultants

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.

Find Out Exactly How We Can Help
by Answering 4 Simple Questions

Not sure where to start in finding help for your specific financial situation? Answer these 4 easy multiple-choice questions to get pointed in the right direction. All you have to do is click the boxes that apply to you and then the green button when you're done.

How We Can Help Self Assessment

1. What is your primary financial concern?

Addressing my debts Creating or reviewing my budget Improving my financial knowledge (how credit works, credit report, etc.) Saving for a specific goal, such as retirement, a vacation, or major purchase Business-related issues (e.g. debt, operating losses, etc.)

2. Do you currently carry balances on any of the following? (Check all that apply)

Unsecured debts (e.g. credit cards, unsecured lines of credit or loans, payday loans) Secured debts (e.g. mortgages or secured lines of credit, car loan) Payday loans Government debts (e.g. taxes, student loans, EI) Service providers (e.g. phone/internet, utilities, gyms etc.)

3. Which of the following best describes you?

I pay off my balances in full each month I carry a balance but my debts are in “good standing” I carry a balance and I am behind in my regular payments I am receiving collection calls, letters, or threats to repossess assets I have been sued by one or more creditors

4. What is your household’s primary source of income?

No income Government Income Assistance and/or disability programs (e.g. PWD, ODSP) EI or Government pensions (e.g. CPP/OAS) Employment Self-Employment Work-based pensions

Helping people resolve their debts is what we do best. We can help you assess your situation and review all your options to deal with your debts.

How Your Credit Will Be Impacted by a Consumer Proposal

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.

Contact Us for More Info About Filing for a Consumer Proposal in Barrie, Ontario

When 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 Barrie at 1-888-527-8999. You can also email or chat with us online right now.

Online Chat

Let Us Help You

Related Resources

Some of these resources may also be helpful to you.

Debt Consolidation Options & Alternatives

There are more debt consolidation options and alternatives than most people know about. Discover the option that will work the best for you.

How a Debt Management Program Works

Discover how it can consolidated debt, reduce or eliminate interest rates, and help get someone out of debt.

Consumer Proposals Versus Bankruptcy - The Differences

Find out the similarities and differences between Consumer Proposals and Bankruptcy, and learn what to watch out for.

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.