Deciding to File a Consumer Proposal
People who are faced with financial difficulty and are unable to pay their bills as they become due may feel trapped, worried and even hopeless. It is very stressful dealing with debt. Not only can it cause you to lose sleep at night, but stress caused by debt can also result in a number of serious medical conditions. However, the situation is not hopeless. There are options out there, including consumer proposal options, which can help you eliminate your debt and put you in a position to begin rebuilding your financial life.
A consumer proposal is a legal process. Through this process, you make an offer to settle your debts with your unsecured creditors. Most consumer proposals see you offer to repay a portion of your debts over a specified period of time. The remaining outstanding debts will be eliminated once the proposal is paid in full and all duties have been performed.
If you are considering a consumer proposal, options are available to you. Speaking with a licensed trustee in bankruptcy can help you understand all of the relevant details of a consumer proposal as well as the other options that could be available to you. Every financial situation is different and, therefore, there is no single solution that works perfectly for everyone. Meeting with a trustee can help you understand the different debt relief processes and options that may work for your situation.
Having this information allows you to make an educated decision about your financial future.
The decision for how you would like to proceed is always yours and yours alone. While a trustee will present you with the options available and provide you with details on these choices, he or she will never pressure you to choose one process over another. Trustees are trained, registered and licensed by the federal government. They are also bound by a strict code of ethics. This means that they are required to provide you with information on all possible options, not just those that they can help you with or those that they administer. This ensures that you will receive the information you need and that you are in a position to make the right choice for your financial future.
Most trustees offer a free consultation, so you can speak with a trustee, have him or her review your financial situation and find out the available options at no charge. One process presented to you may be a consumer proposal. Options such as bankruptcy may also be discussed, depending on your situation.
Consumer Proposal Details
If you decide to file a consumer proposal, your trustee will determine what a fair offer to your creditors will be. This offer will then be sent to all of your unsecured creditors. All unsecured creditors must be included in a consumer proposal. You can’t exclude any of them.
Once your proposal is sent, your unsecured creditors will then have 45 days to vote on whether or not they will accept the offer. If the majority vote to accept the proposal, then all unsecured creditors are bound by those terms.
Consumer Proposal Duties
You are required to perform certain duties as a part of the consumer proposal process. Obviously, the main one is to make your payments as outlined in the proposal. In most cases, these payments will be made monthly. You will make your payments to your trustee who will distribute them to your unsecured creditors. There are no additional payments that need to be made. All administrative costs are taken from your proposal payments.
You will also need to attend two financial counselling sessions. These sessions will provide you with important information on budgeting and money management so that you will be less likely to get into financial trouble in the future. You will also learn what steps you can take to rebuild your financial life and improve your credit rating.
You also need to keep your trustee updated if you move, change jobs or change your phone number. This is so your trustee is always able to contact you as necessary throughout the process.
If you complete these required duties, you will receive a Certificate of Full Performance once your proposal is complete. Your remaining outstanding debts will be forgiven and you will be able to start rebuilding your financial life.
A consumer proposal is one of the options available to those who are struggling with debt. For information on consumer proposal and options that may help you, speak with a trustee.