Consumer Proposals in Richmond
Learn how they work plus what to watch out for.

Consumer Proposal Richmond, BC - Straight Facts and Other Options

What is a consumer proposal, and could it be the best option for my situation?

One option to consolidate your debts is to file a Consumer Proposal in Richmond. 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.

The Advantages & Disadvantages of Filing a Consumer Proposal in BC

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

Advantages

Disadvantages

  • 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

 

See Her Story

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 a Consumer Proposal Impacts 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 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 Info About Filing for a Consumer Proposal in Richmond, BC

There are quite a number of options between financial difficulty and bankruptcy. A Consumer Proposal might be one good option for some people, but it's not the best option for everyone. To find out what other options you have, speak with one of our professionally trained Credit Counsellors today, in person or over the phone. Our appointments are free, non-judgmental, and completely confidential.

To ask us some questions or to make an appointment to speak with a Counsellor, phone us in Richmond at 604-527-8999. You can also email or chat with us online right now.

Office Serving Richmond: Suite 495 - 1140 West Pender Street, Vancouver, BC V6E 4G1

Phone: 604-527-8999

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