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Filing for a consumer proposal is the number one alternative to personal bankruptcy in British Columbia. A consumer proposal allows you to settle your debts for less than what you owe by making a “deal” with your creditors and consolidating your debts into one manageable, interest-free monthly payment.
A consumer proposal can eliminate virtually all types of debt, including CRA debt and student loans. If you owe less than $250,000 (excluding your mortgage) and have a steady income, a consumer could be a great solution for you and your family. However, it’s very important to note that only a Licensed Insolvency Trustee can file a consumer proposal.
Here’s why filing a consumer proposal is a great solution for many people, when compared to other debt-relief alternatives:
There are some cons that come along with filing for a consumer proposal, as this may not be the best option for everyone.
A consumer proposal will usually take longer to complete than a bankruptcy. By lowering your monthly payment through a consumer proposal, you are paying your creditors back over a longer period of time. However, if your financial situation improves, you can pay off a proposal early by increasing your payment and frequency or with a lump sum.
And of course, a consumer proposal does affect your credit rating – an R7 note (a note on your credit report that shows you’ve entered into an agreement to pay back your debt) will remain on your credit report for three years after completion. The R7 note is not desirable, but it’s still better than the R9 note given for a bankruptcy. And, chances are, you have a history of missing payments and you may already be unable to access credit due to a poor credit score. The good news is, it’s often possible to get a secured credit card during a consumer proposal, so you can start building your credit immediately after filing for a consumer proposal.
If it sounds like a consumer proposal is the right solution for you, the next step is to come in and meet with one of our Licensed Insolvency Trustees at one of our 12 conveniently located offices. We believe it is important for you to understand each and every financial relief option available to you. We are happy to meet with you to discuss all options in detail and to ensure you are making an informed decision in order to gain relief from any financial stress you may be experiencing.
Licensed Insolvency Trustee
Greg Best enjoys working with clients to create solutions for their financial needs.
CPA, CA, CIRP
Licensed Insolvency Trustee
Chris Sinclair believes a practical approach is required to solve serious financial difficulties.
Cynthia’s goal is to ensure that every client feels respected and understood and to instill hope that they can get their life back by giving them the fresh start they deserve.