Consumer Proposals in Brockville

What you need to know and watch out for.

Consumer Proposal Brockville, Ontario – Other Options & Stuff You Need to Know

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

Filing a Consumer Proposal in Brockville 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 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 Proposal

There are some clear advantages and disadvantages of filing for a Consumer Proposal. They 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 Brockville, 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 private. A proposal is filed as a permanent public record and is included on a searchable database
It costs more than going bankrupt
The Consumer Proposal must be approved by a Judge
It can be rejected by your creditors. If they reject it, you may have to offer them more money for to
Missing more than 2 payments may mean that you need to file for bankruptcy
Not 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 included
Depending on the type of assets you have, some might need to be sold
It may affect future employment opportunities, and the permanent record of your insolvency can put certain professional licenses at risk

There’s a Way Out of Debt with Help

“I had just come to the point where I had given up hope – that there’s no way I could ever repay my debt. A friend of mine suggested I reach out, and I thought I’d get some condescending person on the phone lecture me about money, but my counsellor was the most compassionate, caring person who became sort of my own personal cheerleader.”

– Charis, Actual Client

Beware 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 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..

Speak to a Non-Profit Credit Counsellor

Speak 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.

Don't Pay Anyone But a Bankruptcy Trustee

Never pay money to anyone for Consumer Proposal services except a licensed bankruptcy trustee. By law, they are the only ones allowed to provide these services and receive payment for their services.

Watch Out for 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 a Consumer Proposal Can Impact Your Credit

Once you begin making payments on a Consumer Proposal, a note is placed in the public records section of your credit report that states that you have filed a proposal. Anyone who you have given permission to see your credit report can also see the public records section.

Your creditors may also report a “7” rating on any debt included in your proposal. This rating indicates that they are receiving your payments through a third party. In this case, your trustee is the third party. Your monthly payment on your Consumer Proposal is remitted to 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 Information About Filing for a Consumer Proposal in Brockville, 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 Brockville at 1-888-527-8999. You can also email or chat with us online right now.

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Consumer Proposal vs Bankruptcy - The Differences

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Ensuring Your Interests are Always First

In everything we do, our goal is to always put the interests of consumers first and do what is best for them. Two important ways we pursue this is through transparency and accountability. We are held accountable to the highest and most demanding standards in our industry.