If you’re having difficulty paying off your debts, you may be feeling overwhelmed with fear and anxiety. A Consumer Proposal can be an ideal solution to relieve your debt and help you get a fresh start. In simple terms, a Consumer Proposal is an offer to your unsecured creditors to repay a portion of your debt, based on your financial ability. But what exactly does it involve? We’ve outlined the Consumer Proposal process below, so you know what to expect.
Filing the Consumer Proposal
When filing a Consumer Proposal, a debt repayment offer must be written and submitted to your creditors. The team of Licensed Insolvency Trustees at Fuller Landau will be by your side through every step of this process, keeping you informed and negotiating on your behalf for a Consumer Proposal that suits your current financial situation.
Here’s how the process works:
- Schedule a free consultation with Fuller Landau. We’ll make an appointment for you to meet with one of our experienced insolvency professionals for a thorough assessment of your financial situation. No judgment, no blame. Our focus is on getting you the debt relief you need.
- Taking into consideration all of your financials, your living situation, your income, your dependents, and a number of other factors, we will help you determine if a Consumer Proposal is both necessary and your best course of action.
- If you decide to proceed with a Consumer Proposal and meet the eligibility requirements, we will write and file the offer on your behalf. This will immediately freeze your debts, and will stop any further interest accrual and wage garnishments.
- We will then become the point-of-contact for your creditors. As long as your Consumer Proposal is in effect, you will not have to deal with them again. No more harassing calls from creditors or late payment notices in the mail.
- Your creditors will have 45 days to accept, reject, or renegotiate your proposal. During this time, you may need to attend a Meeting of Creditors, if one is called.
- Once your proposal is accepted by your creditors, there is a 15-day waiting period before your proposal is approved by the court. Once this happens, your Consumer Proposal is legal and binding upon all creditors.
What Makes a Consumer Proposal Successful?
So what exactly is involved in a successful Consumer Proposal? There are three conditions that typically must be met in order for your Consumer Proposal to be accepted by your creditors:
- Must be a reasonable percentage of total debt (usually about 30%)
- Must offer more to the creditors than they would receive if you filed for Bankruptcy
- Must be fair and reasonable to both you and your creditors, based on your ability to afford and manage the monthly payments
Fulfilling Your Consumer Proposal
There are a handful of obligations that come with filing a Consumer Proposal. To make sure that the proposal is honoured, and to keep you both out of Bankruptcy and free from further debt, you must do the following:
- Make Your Payments. Each month you will make an agreed fixed payment. This is a minimum payment which does not fluctuate. If you miss three payments over the course of the proposal, you will be in breach of the agreement, causing a “Deemed Annulment”. You want to avoid this at all costs.
- Attend Financial Counselling Sessions. You will be required to attend two financial counselling sessions within the first 7 months of filing the proposal. These sessions will help you to improve your money management and budgeting skills, and will provide you with a workable plan to avoid financial difficulty in the future.
- Keep Updated Contact Information. If you move, change jobs, or get a new phone number, you are required to let us know. It’s also a good idea to give us your most active email address, to make sure that we can get in touch with you at any time.
Do you have any questions about the Consumer Proposal process? If you are experiencing financial difficulties and want to learn if a Consumer Proposal is right for you, contact us today.