Consumer Proposal Brossard, Quebec – Straight Facts and Other Options
What is a consumer proposal, and is it the best option for me?
One option to consolidate your debts is to file a Consumer Proposal in Brossard. 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 arranged and administered by a bankruptcy trustee and costs about $1,500 to file. You pay an initial setup fee, and then, if it is accepted by your creditors, you will pay the remaining balance to proceed. In addition to this, the trustee will also retain 20% of your future payments as a fee for administering your Consumer Proposal. To be legally binding, the creditors who hold the majority of your debt must agree to the proposal. Once they do, you repay the agreed amount over a maximum of 5 years.
Advantages and Disadvantages of Filing for a Consumer Proposal
Consumer Proposals contain certain advantages and disadvantages. These can include the following:
- It can significantly reduce the amount of debt you have to repay your creditors
- It can be an effective method of debt consolidation in Brossard, Quebec if:
- You cannot afford to pay back all the debt you owe
- You have steady income
- Your budget has enough money in it for you to make monthly payments
- Has the potential to be a good option if:
- You aren’t able to qualify for a consolidation loan
- If you have debts (like high government debt) which need to remain outside of a debt management program
- Will put active collection of student loan payments on hold
- It is one of the final ways of avoiding bankruptcy
- It’s not private. A proposal is a permanent public record included on a searchable database
- It’s more expensive than declaring bankruptcy
- It must be approved by the Court
- Creditors can reject the Consumer Proposal – if they do, you may have to offer them additional funds otherwise your proposal will not proceed
- If you miss more than 2 payments you may need to file for bankruptcy
- Student loans can’t be included if they are less than 7 years old
- Secured debts aren’t included
- Some assets (such as your home, vehicles, or investments) may need to be sold
- The permanent record of your insolvency can put certain professional licenses at risk and may also affect future employment opportunities
There’s a Way Out of Debt with Help
“I had just come to the point where I had given up hope – that there’s no way I could ever repay my debt. A friend of mine suggested I reach out, and I thought I’d 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 Client
Beware 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 Off
Follow 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 to a Non-Profit Credit Counsellor
Don't Pay Anyone But a Bankruptcy Trustee
Watch Out for Consultants on Commission
How a Consumer Proposal Impacts Credit
Once you enter into a Consumer Proposal, a special notation is placed on your credit report in the public records section. Anyone who you allow to look at your credit report can see the public records section.
Additionally, it is possible that your creditors will report a “7” rating on any debt included in the proposal. This “7” rating means that creditors are receiving your payments through a third party. In this instance the third party would be your trustee. When you send a payment to your trustee, they distribute the agreed upon dollar amounts to all of 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’re making all of your proposal payments, you’ll be that much further ahead afterwards when you want to re-build your credit.
When 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 Brossard at 1-888-527-8999. You can also email or chat with us online right now.
Related Articles of Interest
Here are some related topics that may be useful for you.
Debt Consolidation Options & Alternatives
How a Debt Management Program Works
The Differences Between Consumer Proposals & Bankruptcy
Ensuring Your Interests are Always First
Our highest goal is to always put you first and look out for your best interests in all we do. One of the ways we do this is through accountability and transparency. Our organization and its staff are held to the most rigorous standards of accountability in our industry.
- The Office of the Superintendent of Bankruptcy for Quebec
- List of Licensed Bankruptcy Trustees
- Insolvency Terms & What They Mean
- Credit Counselling Society Quebec office locations
The Credit Counselling Society is a leading, non-profit credit counselling service provider in Brossard, Quebec with locations across Canada.