Consumer Proposals in MiltonLearn how they work plus what to watch out for.Consumer Proposal Milton, Ontario - Alternatives & Important Things You Need to KnowWhat is a consumer proposal, and is it my best option?If you are looking to consolidate your debts, one option available is to file a Consumer Proposal in Milton. 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. Advantages and Disadvantages of Filing for a Consumer ProposalThere are some clear advantages and disadvantages of filing for a Consumer Proposal. They include the following: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 Milton, 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 filed as a permanent public record and is included on a searchable databaseIt costs more than going bankruptThe Consumer Proposal must be approved by a JudgeIt can be rejected by your creditors. If they reject it, you may have to offer them more money for toMissing more than 2 payments may mean that you need to file for bankruptcyNot 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 includedDepending on the type of assets you have, some might need to be soldIt may affect future employment opportunities, and the permanent record of your insolvency can put certain professional licenses at riskThere'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. 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.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.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 ProposalOnce 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 \u201c7\u201d 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 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. Contact Us for More Information About Filing for a Consumer Proposal in Milton, OntarioWhen 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 Milton at 647-776-0485. You can also email or chat with us online right now.Office Serving Milton: 77 City Centre Drive, East Tower, Suite 501, Mississauga, ON L5B 1M5Phone: 647-776-0485Related Articles of InterestHere are some related topics that may be useful for you. 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 Links \tThe Office of the Superintendent of Bankruptcy for Ontario \tList of Bankruptcy Trustees \tInsolvency Glossary \tCredit Counselling Society Ontario office locations The Credit Counselling Society is a leading, non-profit credit counselling service provider in Milton, Ontario with 22 locations across Canada. We also provide consumer proposal information in Mississauga, Oakville, Burlington, Halton Hills, Acton, Rockwood, Guelph, Aberfoyle, Puslinch, Hamilton, and Halton Region.