Consumer Proposal Estevan, Saskatchewan – Straight Facts and Other Options
What is a consumer proposal, and could it be the best option for my situation?
If you are looking to consolidate your debts, one option available is to file a Consumer Proposal in Estevan. 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 Proposal
Consumer Proposals contain certain advantages and disadvantages. These can include the following:
Advantages
- It can substantially reduce the amount of debt you are required to pay your creditors
- It can be an effective way of consolidating debt in Estevan, Saskatchewan if:
- You can’t afford to repay all of what you owe
- You have stable income
- You have enough money in your budget to make monthly payments
- It will pause active collection on student loan payments
- Can be a good option if:
- You don’t qualify for a debt consolidation loan
- If you have debts (like high government debt) that can’t be included in a debt management program
- It is one of the last ways to avoid bankruptcy
Disadvantages
- It’s not a private matter. A Consumer Proposal is filed as a permanent public record and is included on a searchable database
- It costs more than filing for bankruptcy
- The Court must approve it
- Creditors can choose to reject the proposal. If they do, you may need to offer them additional funds to convince them to proceed
- You 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 payments
- Secured debts cannot be put into a proposal
- Student loans less than 7 years old can’t be included
- It can put certain professional licenses at risk, and the permanent record of your insolvency may also affect some future employment opportunities
There’s Life Beyond Debt for Everyone
“When debts became a problem, I felt very overwhelmed – 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 Client
Beware 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 Off
Follow 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.
Speak to a Non-Profit Credit Counsellor
Don't Pay Anyone But a Bankruptcy Trustee
Watch Out for Commission Based Debt Consultants
Discover Your Options
A Visual Overview of Possible Options
Here are some options that may be available to you based on the information you have provided about your financial situation. The most likely options are in green, less likely in yellow, and least likely in red. This is only intended to provide you with a general idea of the options that may be available to you. A credit counsellor will need to go over your information in much more detail to make a more precise determination.0
Option
Do a Deeper Dive to Uncover More Options
It looks as though your situation requires more in-depth analysis from a trained credit counsellor. They can help you optimize your budget, explore options, and create a plan to get back on track.
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Option
Self-Managed Solution
After thoroughly exploring your options with a credit counsellor, they can help you put together a plan to get out of debt in a reasonable amount of time. You can then implement this plan on your own.
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Option
Debt Consolidation Loan
Based on the information you've provided, it appears as though this could be a possibility if your credit score is strong enough.
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Option
Debt Management Program
It appears as though this may be an option for you. A Debt Management Program eliminates or drastically reduces interest and consolidates all payments into one.
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Option
Consumer Proposal
This may be an option for you to consider. It's a legal process that consolidates all payments into one. Talk to a credit counsellor about this and see if it makes sense for your situation.
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Option
Bankruptcy
Based on the information you've entered, it appears as though bankruptcy may be an option to resolve your financial challenges. You should speak with a credit counsellor about this and make sure you've exhausted all other options first.
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Option
Orderly Payment of Debts
Based on what you've entered, it looks as though an Orderly Payment of Debts (OPD) program may be an option for you. To find out if this would make sense for your situation, you should speak with a credit counsellor.
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Option
Voluntary Deposit
Based on the information you've provided, it looks as though a voluntary deposit program may be an option to address your debt situation.
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Bonus Option
Online Workshops
Learn how to improve your financial situation, create a budget, make your dollars stretch further, and get out of debt with one of our many helpful online workshops we call webinars.
More Specifics on How We Can Help You
Get Help Today
Give us a call to speak with one of our credit counsellors at 1-888-527-8999, or if you'd like us to contact you instead, please fill out the form below.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 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.
Between 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 Estevan at 1-888-527-8999. You can also email or chat with us online right now.
Related Articles of Interest
You may find some of these articles to be helpful.
Debt Consolidation Options & Alternatives
How a Debt Management Program Works
Consumer Proposals Versus Bankruptcy - The Differences
Putting Your Interests First
Our 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
- The Office of the Superintendent of Bankruptcy for Saskatchewan
- List of Bankruptcy Trustees
- Insolvency Glossary
- Credit Counselling Society Saskatchewan office locations
The Credit Counselling Society is a leading, non-profit credit counselling service provider in Estevan, Saskatchewan with