Consumer Proposals In Calgary Alberta
Consumer proposal is an alternative to bankruptcy for qualifying individuals. A consumer proposal is an arrangement between you and your creditors, enabling you to repay a portion of your debts while the remaining portion is forgiven.
As your local insolvency trustees, we help in filing Consumer Proposal/ debt consolidations to citizens of Calgary and surrounding areas. We understand that many people livepaycheck to paycheck, often struggling to repay the minimums on their credit cards. We also understand how important it is to have a cost-effective alternative to filing for personal bankruptcy, and that is why we are here.
With a consumer proposal, you no longer have to live in uncertainty, worrying about perpetual debt following you everywhere you go. Now, you can protect your family and your assets, while paying your creditors and stopping interest charges.
The process of starting a consumer proposal in Calgary begins as soon as you understand your options and feel comfortable that a Consumer Proposal is the right solution. Once you have made the decision to pursue this option, we will proceed to help you through the entire consumer proposal process.
A consumer proposal is a formal and legally binding agreement designed to modify the amount that you owe to your creditors. The main purpose is to propose that your creditors accept a portion of your obligation and forgive the remaining amount, significantly decreasing your monthly payments and eliminating uncertainty through a definite repayment period – generally, 5 years or less.
Our Licensed Insolvency Trustees, acting as your proposal administrator, can file a consumer proposal for you if you have outstanding debt between $5,000 and $250,000 yet do not want to declare bankruptcy. We prepare the proposal based on the information that you provide, filing it with the government officer who oversees insolvency administrations in Canada, known as the Office of the Superintendent of Bankruptcy.
Next, we submit a report about your situation and the consumer proposal to your creditors, which lists the creditors, our professional opinion that the proposal is fair and reasonable, and that you can follow through with the plan. Creditors then have the opportunity to vote on the proposal and, once the majority have accepted it, the proposal is legally binding on ALL of your creditors as long as you comply with the required terms.
To learn more about how a consumer proposal can help you, along with its key advantages, visit our Consumer Proposal Calgary page for a clear and concise overview.
Additional benefits include:
Your credit rating from a consumer proposal typically results in an R7 rating, while if you file for bankruptcy, your credit rating will go to R9 (the worst rating on a scale of 1 to 9).
For a consumer proposal, you need to report your income once, upon filing. For a bankruptcy, you need to report your income each month until discharged.
The consumer proposal remains on your record at Equifax and Trans Union for 3 years after you complete the repayment process, while a bankruptcy remains on your record for 6 years after completion.
It is important to note that a consumer proposal also has its own set of disadvantages:
If your monthly income declines, your payments are still based on the income that you report on the date of filing the proposal.
To entice creditors to accept a reduction in their debt and allow you to avoid bankruptcy, you must make the proposal more financially attractive to them than a bankruptcy.
Consumer proposals are negotiated and voted upon, with the number of votes determined by the dollar value that the creditors are owed. If you file for bankruptcy, there is no negotiation, and the creditors follow the process given under the Bankruptcy and Insolvency Act.
Finally, the following are ways in which a consumer proposal is similar to a bankruptcy:
Both agreements are legally binding on unsecured creditors and will stop legal action from these creditors (e.g., wage garnishments).
Both will stop interest charges.
Tax debt is discharged with a consumer proposal or bankruptcy.
Under both agreements, certain obligations are not affected or included, such as secured debts (mortgages and car financing), student loans less than 7 years old, as well as child and spousal support.
If you are considering a consumer proposal in Calgary, our team at Hudson & Company can help you establish a creative, well-planned and well thought out proposal.
We will assess your situation, discuss your options with you, and prepare and file a consumer proposal to your creditors. Simply call us today at 403-265-HELP (4357) for your free consultation.