A consumer proposal is one of the best options for dealing with personal debt. This solution creates an agreement between you and those you owe money to (your creditors) outlining how you will repay your debts.
Consumer proposals are legal agreements governed by the Bankruptcy and Insolvency Act. A Licensed Insolvency Trustee (LIT) can only administer them. That's where we come in – Crowe MacKay & Company's LITs will work with you to develop a proposal for your creditors based on your financial situation.
A consumer proposal is very flexible and tailored to fit your financial situation, allowing you to keep your assets, stop collection calls, and repair your debt - all while paying less!
To begin the proposal process, we will need to know the basics of your situation. Here’s a list of what you will need to provide to start:
Your current financial situation
How much you earn
Your current debts and whom you owe money to
We know how much stress you are under, and that's why we manage all the negotiations with your creditors, giving you time to take a breath. Working with a Crowe MacKay & Company LIT means getting a partner committed to your financial success.
A consumer proposal usually covers all your unsecured debts, which may include the following:
Lines of credit
To file a consumer proposal in British Columbia, you first need to determine your eligibility. To qualify for a consumer proposal, you must meet the following criteria:
What Are the Benefits of Filing a Consumer Proposal?
A consumer proposal is considered a better solution for both the debtor and the creditor than other debt-relief options. Filing a consumer proposal in Vancouver allows you to repay a portion of your debt without giving up your possessions.
Apart from giving you a fresh start, here are some of the reasons why you should choose a consumer proposal:
The key difference between personal bankruptcy and a consumer proposal lies in its impact on your assets. Although bankruptcy is a quick and cheaper way out of debt, you will have to surrender your assets to start fresh. On the other hand, when you file for a consumer proposal with your creditors, you can retain all your assets and get a chance to settle the debt fairly and responsibly.
Opting for a consumer proposal comes with many advantages. These include legal protection from your creditors, no collection calls, and a chance to settle to an affordable monthly payment that never increases. If you declare bankruptcy, you must produce detailed reports to a trustee, including your monthly income and expenses.
While every situation is unique, it can take up to 60 days for a consumer proposal to be approved. Once drafted, the proposal is submitted to your creditors and the Office of the Superintendent of Bankruptcy (OSB) for consideration.
Creditors holding at least 25% of your debt can request a meeting within 45 days of filing the proposal. If no meeting is called, the proposal is considered acceptable. If a meeting is requested, the creditors will vote on the proposal.
Once your creditors have accepted your proposal, the OSB has 15 days to ask your LIT (us) to apply to the court to have the proposal reviewed. The proposal is approved if the court does not make a request.
Filing for a consumer proposal does not affect the terms of your mortgage. If you need to renew your mortgage while in the middle of a consumer proposal with your present lender, it should not be a problem if you make your payments on time. If you decide to change your mortgage lender despite being bound by a consumer proposal contract, the approval of your application may be in jeopardy. This doesn't mean you will be denied a mortgage, but your payments may have a higher interest rate.
Filing for a consumer proposal will give you an R7 credit rating, which means you have made a settlement with your creditors. Your credit report will also note that you filed a consumer proposal from the date of final proposal payment to 36 months.
Crowe MacKay & Company’s Licensed Insolvency Trustees share how to understand your credit rating, the impacts of a consumer proposal on your credit, and how to rebuild it.
Once the terms of your proposal are fulfilled (you’ve paid off your debts), you will be issued a Certificate of Full Performance and legally be released from the debts included in your consumer proposal.
Complete the following form, and one of our Licensed Insolvency Trustees will contact you for a free, no-commitment consultation to evaluate your financial situation.
If you require immediate assistance, please get in touch with us by phone at (604) 689 3928 or email at firstname.lastname@example.org
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