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Consumer Proposal Edmonton, Alberta - Straight Facts and Other Options | Canada

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

Filing a Consumer Proposal in Edmonton 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 Edmonton, Alberta 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 arranged and administered by a licensed bankruptcy trustee and it costs approximately $1,500 to file. You pay an initial setup fee to begin, and then, if the arrangement is acceptable to your creditors, you then pay the balance to continue the process. The trustee you work with will additionally hold back 20% of your future payments as an administration fee. For the Consumer Proposal to be legally binding, your creditors who own the majority of your debt must agree to the proposed repayment plan. If they do, you then have to repay the agreed amount over a maximum repayment period of 5 years.

Advantages and Disadvantages of Filing a Consumer Proposal

There are definitely advantages and disadvantages to filing a Consumer Proposal. Here are some that are important to be aware of:

Advantages

   

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

 

  1. Speak with a non-profit Credit Counsellor about your financial situation first. They will be able to review your situation with you and help you explore and understand all your options to deal with your debt.
  2. Never pay money to anyone for Consumer Proposal services except a 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 private. A proposal is filed as a permanent public record and is included on a searchable database
  • It costs more than going bankrupt
  • The Consumer Proposal must be approved by a Judge
  • It can be rejected by your creditors. If they reject it, you may have to offer them more money for to
  • Missing more than 2 payments may mean that you need to file for bankruptcy
  • Not all debts can be included (like secured loans)
  • If you stopped being a student less than 7 years ago, your student loans can't be included
  • Depending on the type of assets you have, some might need to be sold
  • It may affect future employment opportunities, and the permanent record of your insolvency can put certain professional licenses at risk

How a Your Credit Will Be Impacted by a Consumer Proposal

When you make payments on a Consumer Proposal, there is a note on your credit report in the public records section that you have filed a proposal. Anyone who has your consent to see your credit report will see the public records section as well.

In addition, your creditors may report a "7" rating on the debts included in the proposal. This means that they are receiving payments through a third party. The third party is your trustee. When you make a payment to your trustee, they disburse the agreed upon amount to each of your creditors after 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.

Contact Us for More Information About Filing for a Consumer Proposal in Edmonton, Alberta

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 Edmonton at 780-701-0083. You can also email or chat with us online right now.

Edmonton Offices
Suite 610 - 10216 124 Street NW
Edmonton, AB T5N 4A3

Suite 200 - 6005 Gateway Boulevard
Edmonton, AB T6H 2H3

Phone: 780-701-0083

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Best choice before visiting a bankruptcy trustee in Edmonton, Alberta, Canada. Featured online & in the media.

The Credit Counselling Society is an award winning, non-profit credit counselling service provider in Edmonton, Alberta with 22 offices in communities across Canada.

Our Edmonton office also provides consumer proposal options and info in St. Albert, Sherwood Park, Beaumont, Devon, Leduc, Calmar, Spruce Grove, Morinville, and Fort Saskatchewan.