St. Thomas Consumer Proposal Information & AlternativesWhat you need to know and watch out for.Consumer Proposal St. Thomas, Ontario - Alternatives & Important Things You Need to KnowWhat is a consumer proposal, and is it my best option?One option to consolidate your debts is to file a Consumer Proposal in St. Thomas. It is a legal process under the Bankruptcy and Insolvency Act between you and your creditors to repay part of what you owe. The amount you repay is largely based upon your income and what 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. Consumer Proposal Advantages and DisadvantagesThere are some clear advantages and disadvantages of filing for a Consumer Proposal. They include the following:AdvantagesIt can significantly reduce the amount of debt you have to repay your creditorsIt can be an effective method of debt consolidation in St. Thomas, 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 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 Life Beyond Debt for Everyone"When debts became a problem, I felt very overwhelmed \u2013 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 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 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. \tSpeak to an accredited, non-profit Credit Counsellor about your financial situation first. They will go over your whole situation with you and take the time to help you explore and understand all your options to resolve your debt problems.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.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 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 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. Call Us to Learn More About Filing a Consumer Proposal in St. Thomas, Ontario and Possible AlternativesBetween 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 St. Thomas at 1-888-527-8999. You can also email or chat with us online right now.Related ResourcesSome of these resources may also be helpful to you. 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.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 TrusteesInsolvency Terms & What They MeanCredit Counselling Society Ontario office locations The Credit Counselling Society provides not for profit credit counselling services in St. Thomas, Ontario and is recognized as one of Canada's leading debt relief services with 22 offices in communities across the country.