Ottawa Consumer Proposal Information & AlternativesFind out what you need to know and what to look out for.Consumer Proposal Ottawa, Ontario - Straight Facts and Other OptionsWhat is a consumer proposal, and is it my best option?Filing a Consumer Proposal in Ottawa 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 ProposalThere 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 Ottawa, 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 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 OffFollow the tips outlined below, but start by speaking to a member of Credit Counselling Canada (a national association of non-profit credit counselling organizations who don't work on commission). If a Consumer Proposal is a truly good option for you, one of their agencies will inform you and refer you to a reputable bankruptcy trustee 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 a Consumer Proposal Impacts 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 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 Ottawa, OntarioThere are quite a number of options between financial difficulty and bankruptcy. A Consumer Proposal might be one good option for some people, but it's not the best option for everyone. To find out what other options you have, speak with one of our professionally trained Credit Counsellors today, in person or over the phone. Our appointments are free, non-judgmental, and completely confidential.To ask us some questions or to make an appointment to speak with a Counsellor, phone us in Ottawa at 613-234-0505. You can also email or chat with us online right now.Ottawa Office: 514 - 130 Albert Street, Ottawa, ON K1P 5G4Phone: 613-234-0505Related TopicsHere are some related topics that may be useful for you. There are more debt consolidation options and alternatives than most people know about. Discover the option that will work the best 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.Learn the difference between a Consumer Proposal and Bankruptcy. Find out how they are different and how they are similar.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 Ottawa, Ontario with 22 locations across Canada. Our Ottawa office also provides consumer proposal options and info in Kanata, Nepean, Ottawa West, Ottawa South, Stittsville, Greenbelt, Ottawa East, Cumberland, Embrun, Casselman, Winchester, Kemptville, Smiths Falls, Carleton Place, Perth, Mississippi Mills, Arnprior, and Renfrew.