Consumer Proposals in Dauphin
Find out what you need to know and what to look out for.

Consumer Proposal Dauphin, Manitoba - Straight Facts and Other Options

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

If you are looking to consolidate your debts, one option available is to file a Consumer Proposal in Dauphin. 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 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.

Advantages and Disadvantages of Filing for a Consumer Proposal

Consumer Proposals contain certain advantages and disadvantages. These can include the following:

Advantages

  • It can reduce the amount of debt you need to repay your creditors by a considerable amount
  • It can be a helpful debt consolidation method in Dauphin, Manitoba 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

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
It's Okay to Ask for Help with Debt

"Life just happened. My debt got to the point where I started to feel like I was drowning. I didn’t feel like I could fix it on my own, and I wanted to start living my life as an adult without debt. I decided to reach out for help. Feeling relieved, I knew that everything was going to be okay – a lot of work – but okay. I had a plan to pay back my debt and continue doing the things I love to do like yoga and travelling."

- Yasmine, Actual Client

 

See Her Story

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 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 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 Dauphin, Manitoba

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

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