Consumer Proposals in Richmond HillFind out what you need to know and what to look out for.Consumer Proposal Richmond Hill, Ontario - Straight Facts and Other OptionsWhat 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 Richmond Hill. 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 setup by a bankruptcy trustee and costs around $1,500. You'll pay an initial setup fee, and if it is accepted by your creditors, you will pay the balance to proceed. In addition, the trustee will keep 20% of your future payments as your Consumer Proposal administration fee. For the proposal to be legally binding, the creditors who own the majority of your debt must agree to the arrangement. If they do, then you will be required to repay the agreed upon amount over a maximum term 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 substantially reduce the amount of debt you are required to pay your creditorsIt can be an effective way of consolidating debt in Richmond Hill, 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 a private matter. A Consumer Proposal is filed as a permanent public record and is included on a searchable databaseIt costs more than filing for bankruptcyThe Court must approve itCreditors can choose to reject the proposal. If they do, you may need to offer them additional funds to convince them to proceedYou might need to sell some of your assets (such as a vehicle, your home, or investments)You may need to file for bankruptcy if you miss more than 2 paymentsSecured debts cannot be put into a proposalStudent loans less than 7 years old can't be includedIt can put certain professional licenses at risk, and the permanent record of your insolvency may also affect some 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 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. 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 Impacts CreditOnce 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 Richmond Hill, 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 Richmond Hill at 647-776-0485. You can also email or chat with us online right now.Office Serving Richmond Hill: Suite 200 - 100 Consilium Place, Scarborough, ON M1H 3E3Phone: 647-776-0485Related ResourcesHere 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 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 is a leading, non-profit credit counselling service provider in Richmond Hill, Ontario with 22 locations across Canada. Our office that serves Richmond Hill also offers consumer proposal information in North York, Thornhill, Markham, Gormley, Aurora, King City, Vaughan, Concord, and York Region.