Carleton Place Consumer Proposal Information & AlternativesFind out what you need to know and what to look out for.Consumer Proposal Carleton Place, Ontario - Alternatives & Important Things You Need to KnowWhat is a consumer proposal, and is it the best option for me?If you are looking to consolidate your debts, one option available is to file a Consumer Proposal in Carleton Place. 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 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 substantially reduce the amount of debt you are required to pay your creditorsIt can be an effective way of consolidating debt in Carleton Place, Ontario 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 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 ClientBeware 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 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. \tTalk 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. According to the law, only a licensed trustee is allowed to do the work and charge for Consumer Proposals.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 Your Credit Will Be Impacted by a Consumer ProposalWhen 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\u2019re making all of your proposal payments, you'll be that much further ahead afterwards when you want to re-build your credit. Call Us to Learn More About Filing a Consumer Proposal in Carleton Place, Ontario and Possible AlternativesWhen 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 Carleton Place at 613-234-0505. You can also email or chat with us online right now.Online Chat Let Us Help You Related ResourcesYou may find some of these articles to be helpful. There are more alternative debt consolidation options and services available than most people are aware of. Find the option that's right for you.Learn how a Debt Management Program can consolidate your payments, eliminate interest rates, and get you out of debt and back on track.Find out the similarities and differences between Consumer Proposals and Bankruptcy, and learn what 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 LinksThe Office of the Superintendent of Bankruptcy for OntarioList of Licensed Bankruptcy TrusteesGlossary of Terms Used in InsolvencyCredit Counselling Society Ontario office locations The Credit Counselling Society provides not for profit credit counselling services in Carleton Place, Ontario and is recognized as one of Canada's leading debt relief services with 22 offices in communities across the country.