Consumer Proposal in the Yukon - Straight Facts and Other Options | Canada

What is a consumer proposal and is it the best option for me?

Filing a Consumer Proposal in the Yukon 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.

  See if filing a Consumer Proposal in Yukon, Canada is the best way of consolidating your debt and avoiding bankruptcy.
  All financial decisions have advantages and disadvantages. Consumer Proposals are not any different. A professionally certified Credit Counsellor can help you determine what is in your best interest: a proposal or another option.

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 a Consumer Proposal

There are some clear advantages and disadvantages of filing for a Consumer Proposal. They include the following:

Advantages

   


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

 

  1. Speak 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.
  2. Never hand over money to anyone for Consumer Proposal services except a government licensed bankruptcy trustee.
  3. 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.
  4. Credit Counselling Canada is 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, they’ll let you know and refer you to a reputable bankruptcy trustee for free.

 

 
       

Disadvantages

  • It's not a private mater. 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

How a Your Credit Will Be Impacted by a Consumer Proposal

Once 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 “7” 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’re 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 the Yukon

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 the Yukon at 1-888-527-8999. You can also email or chat with us online right now.

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Best choice before visiting a bankruptcy trustee in the Yukon - Canada. Featured online & in the media.

The Credit Counselling Society is an award winning, non-profit credit counselling service provider in the Yukon with 24 offices in communities across Canada.

 

 

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