BC Consumer Proposal: Filing a Debt Proposal in British Columbia
Filing a Consumer Proposal in British Columbia
If you are in debt, then you may be interested in finding out if consumer proposal is an option for you.
When you file a consumer proposal in BC, then you should know that this is a debt repayment strategy that allows you to consolidate all of your debts.
It’s essentially a legal process between you and the creditor.
You will repay a portion of the debt that you owe, and it is governed by the Bankruptcy and Insolvency Act.
Of course, to some extent, the amount of debt that you repay to your creditors will be based on the income you have.
Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation
A BC consumer proposal can only be arranged and administered by an insolvency trustee.
It costs around $1500 to file as well.
To begin with, you will pay a setup fee.
If this happens to be accepted by your creditors, then you will have to pay the remaining balance in order to move forward.
A consumer proposal in BC is very straightforward in general.
If you are accepted by your creditors then you will need to pay the remaining balance to move forward.
The trustee will then retain 20% of future payments because they administered your consumer proposal in BC.
When everything is sorted, you will then pay the agreed amount over 5 years.
The Advantages of Filing a BC Consumer Proposal
There are so many advantages to filing a BC consumer proposal.
It can really reduce the amount of debt that you have to repay your creditors.
It can be a very effective way for you to consolidate your debt if you cannot afford to repay the debts that you have and if you have a stable income.
It’s also a very good option if you have enough money to make your payments right now.
Another bonus of consumer proposal is that it will pause any active collections on your student loan payments.
It can be a good option overall if you don’t actually qualify for a debt consolidation loan or if you have debts that can’t be included in any kind of debt management program.
The government of Canada worked hard to create the consumer proposal program so that people could enjoy all of the protections that come with filing bankruptcy without having to worry about the high fees.
Essentially, it’s the last option before you file it.
BC residents can draw up this kind of proposal if they work with a bankruptcy trustee.
This proposal lowers your principle and it also freezes the interest charges too.
This lowers your minimum payments and it satisfies your debt.
It also helps you to pay it off faster.
You will be able to make payments much faster or you can pay your creditors in a single lump sum if you want.
One of the main benefits of a consumer proposal is that it can force any hostile creditors to give you way more favourable terms for your debt.
If creditors have at least 51% of your consumer credit and they accept then the other creditors have to abide by the terms too.
There are other benefits as well.
The consumer proposal will also protect your assets and it will secure them.
Things You Need to Know
There are some disadvantages to a consumer proposal.
It’s great for those who have under $250,000 in debt, or $500,000 if you are married.
It’s far too much of a drastic measure though if you owe less than $10,000.
The biggest disadvantage is that it has a negative impact on your credit rating.
That being said, a consumer proposal won’t cost you half as much as bankruptcy will.
You will not be able to get new credit at an affordable interest rate for a set period of time and this can cause you issues if you have a long-term plan.
The only way for you to find out if a consumer proposal is the right option for you would be for you to try and look into the other options that are available.
When you do, you will be able to find out if it is possible for you to take an alternative route or even if you need to find other ways to try and consolidate your debt.
If you want to get some support with your debt then Bankruptcy Canada might be able to help.
We can talk you through the options that are available, and we can also work with you to make sure that you are more than happy with the end result.
Contact us today to find out more.
When you file a consumer proposal in BC, you will work with a licensed insolvency trustee, although they will be known as a consumer proposl administrator during this process.
When you make a debt settlement plan through a proposal, you will include your unsecured debts in your monthly payment plan to your creditors.
Only unsecured debt can be included in a consumer proposal because secured debt cannot be impacted by a proposal plan.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal