Consumer Proposal Port Coquitlam, BC - Other Options & Stuff You Need to Know
What is a consumer proposal, and could it be the best option for my situation?
Filing a Consumer Proposal in Port Coquitlam 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.
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 Disadvantages
There are definitely advantages and disadvantages to filing a Consumer Proposal. Here are some that are important to be aware of:
- It can significantly reduce the amount of debt you have to repay your creditors
- It can be an effective method of debt consolidation in Port Coquitlam, BC 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:
- It is one of the last ways to avoid bankruptcy
- 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
"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.
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.
Talk to a Not-for-Profit Credit Counsellor
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.
Only Pay a Trustee for a Consumer Proposal
Never hand over money to anyone for Consumer Proposal services except a government licensed bankruptcy trustee. The law states that only they are allowed to offer and get paid for these services.
How a Consumer Proposal Can Impact Your Credit
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 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.
Call Us to Learn More About Filing a Consumer Proposal in Port Coquitlam, BC and Possible Alternatives
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 Port Coquitlam at 604-527-8999. You can also email or chat with us online right now.
Port Coquitlam Office: Tri-City Business Centre, Suite 2300 - 2850 Shaughnessy Street, Port Coquitlam, BC V3C 6K5
You may find some of these articles to be helpful.
Debt Consolidation Options & Alternatives
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.
Find Out How a Debt Management Program Works
Discover how it can consolidated debt, reduce or eliminate interest rates, and help get someone out of debt.
- The Office of the Superintendent of Bankruptcy for BC
- List of Bankruptcy Trustees
- Insolvency Glossary
- Credit Counselling Society BC office locations
The Credit Counselling Society provides not for profit credit counselling services in Port Coquitlam, BC and is recognized as one of Canada's leading debt relief services with 22 offices in communities across the country.
Our Port Coquitlam office also provides consumer proposal options and info in Coquitlam, Port Moody, Pitt Meadows, Maple Ridge, Anmore, Belcarra, Burnaby, New Westminster, Surrey, Langley, Fort Langley, and Mission.