A consumer proposal is a legal process (under federal legislation) that helps a person in financial difficulty manage their debt without claiming bankruptcy. Proposals, like a bankruptcy, are used to settle unsecured debt such as credit cards, lines of credit and Revenue Canada debt. Revenue Canada debt is very common and probably involved in 50% of our files as are Pay Day loan companies. A consumer proposal doesn’t deal with secured debt such as a mortgage or an auto loan unless you are wanting to surrender (give back or walk away) from those items. In Canada, about 60% of the Insolvency filings are Consumer Proposals and only about 40% are Bankruptcies. Consumer Proposals will usually be longer and more expensive than a bankruptcy but much less complicated and will be removed from your credit bureau sooner.
A Licensed Insolvency Trustee (otherwise known as a Bankruptcy Trustee) is the only professional licensed to administer a consumer proposal. Lawyers and credit counselors cannot do this. They may advertise the service, but in fact, they will have to refer you to a Trustee, normally for an unnecessary fee. During the consumer proposal process, the trustee notifies and works directly with your creditors on your behalf. They will work with you to propose a settlement to settle the outstanding debt by “Proposing” to pay a portion of the debt in lieu of filing a bankruptcy. In many cases, proposals are made and accepted for a fraction of what is owed. At BNA Solutions, we achieve close to a 95% approval by the creditors on the Proposals we file. Sometimes there is some negotiating involved to get the creditors to agree on the proposal, but that is where the experts at BNA do their best work. Not all creditors have to vote in favor of the Proposal, it is majority rule by dollar value, so often the largest creditor is not in control. It is common to settle for less than 50% of what you owe.
The benefit of a consumer proposal is that once it is in registered and accepted by your creditors, you have five years from the date of filing to pay the amount of the Proposal. With 0% interest and no additional fees, it allows you to begin the process of getting your finances back on track.
Unlike a consolidation loan with a bank or other agency where there are large fees and interest, there is no fee or interest in a Proposal.
If this solution sounds like it would be a good one for you, then please don’t hesitate to reach out to us either by simply calling or filling out the contact us form, for us to get back to you. Let us do the hard work and find the solution to get your life back on track.
Call us. When you call we’ll ask for some information about your situation and arrange a time when you can come to the office and meet with the trustee. From there we can then discuss what various options are available to you. We can typically book you in for an appointment sometimes that day or a day and time that is convenient for you.
Come in for your scheduled appointment. We’ll go over your situation and provide you the best options you have. No matter what your financial situation is the trustee is there to help you. What may seem embarrassing to you is not to us.
Once you’ve met with the trustee we promise that you’ll feel much better and relieved with how we can help. You can be confident you’ve just met with a certified professional who’s sole interest is what’s in your best interest, not the banks or creditors.
Don’t be shy and contact us today to find out if a consumer proposal is a right option for you.
As Alberta is still recovering from one of the worst recessions in the oil and gas industry in quite some time, consumer proposals serve as a tool to help struggling individuals and families cope with their debts. In fact consumer insolvency (bankruptcy) is largely unchanged over the past year, however, consumer proposal filings are increasing.
That’s because consumer proposals are designed to help you get out of the unsecured debt trap and avoid a personal insolvency.