Consumer Proposals in CaledonWhat you need to know and watch out for.Consumer Proposal Caledon, Ontario - Other Options & Stuff You Need to KnowWhat is a consumer proposal, and is it my best option?Filing a Consumer Proposal in Caledon 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 bankruptcy trustee and costs about $1,500 to file. You pay an initial setup fee, and then, if it is accepted by your creditors, you will pay the remaining balance to proceed. In addition to this, the trustee will also retain 20% of your future payments as a fee for administering your Consumer Proposal. To be legally binding, the creditors who hold the majority of your debt must agree to the proposal. Once they do, you repay the agreed amount over a maximum of 5 years. Consumer Proposal Advantages and DisadvantagesThere are definitely advantages and disadvantages to filing a Consumer Proposal. Here are some that are important to be aware of: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 Caledon, Ontario if:You can't afford to repay all of what you oweYou have stable incomeYou have enough money in your budget to make monthly paymentsIt will pause active collection on student loan paymentsCan be a good option if:You don't qualify for a debt consolidation loanIf you have debts (like high government debt) that can't be included in a debt management programIt is one of the last ways to avoid bankruptcyDisadvantagesIt's not private. A proposal is a permanent public record included on a searchable databaseIt's more expensive than declaring bankruptcyIt must be approved by the CourtCreditors can reject the Consumer Proposal - if they do, you may have to offer them additional funds otherwise your proposal will not proceedIf you miss more than 2 payments you may need to file for bankruptcyStudent loans can't be included if they are less than 7 years oldSecured debts aren't includedSome assets (such as your home, vehicles, or investments) may need to be soldThe permanent record of your insolvency can put certain professional licenses at risk and may also affect future employment opportunitiesThere's a Way Out of Debt with Help"I had just come to the point where I had given up hope \u2013 that there\u2019s no way I could ever repay my debt. A friend of mine suggested I reach out, and I thought I\u2019d 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 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 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. 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.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.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. How a Consumer Proposal Can Impact Your CreditWhen 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 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. Call Us to Learn More About Filing a Consumer Proposal in Caledon, Ontario and Possible AlternativesBetween 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 Caledon at 647-776-0485. You can also email or chat with us online right now.Office Serving Caledon: 77 City Centre Drive, East Tower, Suite 501, Mississauga, ON L5B 1M5Phone: 647-776-0485Related Articles of InterestYou may find some of these articles to be helpful. There are more debt consolidation options and alternatives than most people know about. Discover the option that will work the best for you.Discover how it can consolidated debt, reduce or eliminate interest rates, and help get someone out of debt.Learn how Consumer Proposals and Bankruptcy are similar and how they are different. Also learn what you need to watch out for.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 Links \tThe Office of the Superintendent of Bankruptcy for Ontario \tList of Licensed Bankruptcy Trustees \tGlossary of Terms Used in Insolvency \tCredit Counselling Society Ontario office locations The Credit Counselling Society provides not for profit credit counselling services in Caledon, Ontario and is recognized as one of Canada's leading debt relief services with 22 offices in communities across the country. We also provide consumer proposal information in Brampton, Orangeville, and Region of Peel.