Kenora Consumer Proposal Information & Alternatives

Find out what you need to know and what to look out for.

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

What 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 Kenora. 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 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.

Consumer Proposal Advantages and Disadvantages

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 Kenora, 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 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

Watch 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 Keep from Getting Ripped Off

Follow 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 with 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 Consultants on Commission

Find out how the person helping you is compensated. A lot of people who want to advise you on your debts work on commission. Make certain that the “solution” they are recommending is in your best interest – not theirs.

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 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 Kenora, Ontario and Possible Alternatives

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

Online Chat

Let Us Help You

Related Resources

Here are some related topics that may be useful for you.

Debt Consolidation Options & Alternatives

A lot of people are surprised to find out there are more debt consolidation options and alternatives than they knew about. Learn more about these.

Find Out How a Debt Management Program Works

Find out how a Debt Management Program consolidates your payments, reduces your interest rates, and gets you out of debt.

Consumer Proposal vs 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.

Certified by Great Places to Work Canada

Accredited by Canada’s national association of non-profit credit counselling organizations.

North America’s largest association of non-profit credit counselling organizations.

Accredited by the Better Business Bureau.

Related Links

The Credit Counselling Society provides not for profit credit counselling services in Kenora, Ontario and is recognized as one of Canada’s leading debt relief services with offices in communities across the country.