Calgary Consumer Proposal Information
Consumer Proposals in Calgary, AB
Being swamped with debts can create a lot of undue stress and frustration in your life.
While there are many solutions that can help you deal with debt, few of them can offer assistance if you’re struggling with your financial situation.
For instance, a debt consolidation loan may require you to have a decent credit score, and unlocking equity requires that you remortgage your home.
These options can help in the short term, but you’ll still be faced with looming debts over the next couple of years.
A solution to this is to seek real debt relief alternatives.
There are two basic forms of debt relief available to residents in Calgary; bankruptcy claims and a consumer proposal.
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At Bankruptcy Canada, we specialize in offering impartial advice to clients that are considering the idea of claiming bankruptcy.
Contrary to popular belief, claiming bankruptcy doesn’t mean that your assets will be taken from you.
Alberta’s bankruptcy policy allows you to keep much of your assets.
For instance, you’ll retain up to $40,000 of equity in your principal home, household furniture up to $4,000 and even a motor vehicle worth less than $5,000.
As you can see, claiming bankruptcy doesn’t need to mean that everything will be taken from you.
While it can put a stain on your credit rating, it’s arguably one of the most effective ways to completely wipe your debts and seek a fresh new start.
However, there is an alternative for the people of Calgary; a consumer proposal.
What is a consumer proposal?
A consumer proposal is a debt repayment option that allows you to consolidate your debts and repay a part of it instead of everything that you owe.
It’s a legal process that is agreed between you and your creditors.
It is governed by the Bankruptcy and Insolvency Act to ensure the agreement is legitimate and can actually help you clear your debts.
It requires a bankruptcy trustee such as Bankruptcy Canada to get in touch with your creditors before the agreement is finalized.
Your trustee will propose a certain amount that you should repay based on your income and assets.
While it doesn’t provide relief for all of your debts like a bankruptcy claim, it can take off a huge chunk of the consolidated debts that you owe, effectively erasing a portion of your debt.
While you do need to pay back the rest, it’s a good option for those that don’t qualify for a debt consolidation loan and want to avoid the process of claiming bankruptcy.
If you’re interested in learning more about consumer proposals, then we highly recommend reading the rest of this article.
If you have any questions or concerns, feel free to get in touch with our specialists at Bankruptcy Canada to learn more about consumer proposals and the alternatives that are available to you.
Why consider a consumer proposal?
Consumer proposals take up a middle ground between bankruptcy claims and consolidation loans.
They do require you to make monthly repayments but they don’t force you to give up a portion of your assets.
This can be a preferable option in many different circumstances, so here are a couple of reasons why you might want to consider a consumer proposal:
- Are you struggling to make monthly payments? If your current financial situation makes it difficult for you to pay back your loans, then you may want to consider speaking to a bankruptcy trustee for more information about consumer proposals. Since a consumer proposal can erase some of your debt, it ultimately means that you’ll be paying less each month.
- Do you have a stable income? Since you’ll need to pay back a certain amount of money even after a consumer proposal is accepted, you need to have a relatively steady source of income to make regular payments.
- Are you able to budget for your expenses now? Although a consumer proposal does erase some of your debt, it’s a good idea to remember that you still have to repay some of what you owe. This amount can range from being rather large to almost nothing depending on your personal circumstances. If you’re focusing on ways to improve your budgeting and are learning to budget, then a consumer proposal can be a great option for you to erase some of your debt.
- Do you want to pause student loan payments? Consumer proposals can stall the collection of your student loan payments. If this is a concern for you, then a consumer proposal can help.
- Are you unable to qualify for a debt consolidation loan? Debt consolidation is a good alternative to a consumer proposal, but you may be rejected for it if you don’t meet the qualifications.
- Do you have debts that can’t be included in a debt management program? Even if you are accepted for a debt consolidation loan, there may be debts that aren’t included in the debt management program which means you won’t be able to pay them off. If this is the case, a consumer proposal can be a viable alternative.
- Would you prefer to avoid bankruptcy? Claiming bankruptcy can put a mark on your credit history and will make it hard for you to make use of certain financial services in the future. If you want to minimize the impact on your credit score, a consumer proposal is a good option.
- Are you fine with your consumer proposal being public? A lot of people don’t realize that a consumer proposal comes with a public record in a searchable database. If you’re concerned about your privacy then a consumer proposal may not be the best solution.
- Are you willing to sell some of your assets? Much like filing bankruptcy, you may end up in a situation where you need to sell some of your assets in order for the creditor to agree to your consumer proposal.
- Are your debts mostly unsecured? Secured debts aren’t included in a consumer proposal. If you’re trying to erase debts that are secured against something, you’ll need to look for a different solution.
- Have you looked at alternate options already? Lastly, make sure that you’ve looked at all of your existing options before you consider a consumer proposal. Since it comes with a few disadvantages, it’s worth doing a bit more research before you contact a trustee to submit an application. Below, we’re going to talk about a few other ways to help you cope with your growing debts.
A consumer proposal can be a great way for you to overcome your debts.
However, it’s worth remembering that it’s not a completely foolproof way to erase your debt and some responsibility does fall on your shoulders to ensure you can budget for future expenses and fix your spending to ensure you can meet future repayments.
If you miss even two payments, you may be required to claim bankruptcy.
The important thing is to find someone to talk about your financial situation.
At Bankruptcy Canada, we have over 430 trustee offices all over the country, including many in Calgary that would be more than willing to help you organize the paperwork needed for a consumer proposal.
Alternatives to a consumer proposal
A consumer proposal is just one method of debt relief that can help you get your finances in order.
However, if some of the disadvantages are off-putting, then you may want to consider one of the other alternatives.
If you’re confident that you can budget for your future expenses and have enough income to pay off your debts by yourself, then there’s no reason for you to consider a consumer proposal.
If you’re making enough money and your interest rates haven’t gotten out of control, it’s perfectly fine to just focus on managing your money and paying off your debts normally.
This can be one of the best options if you want to avoid doing any paperwork and don’t want to be further indebted to creditors.
Debt consolidation loan
It’s worth considering a debt consolidation loan if you have the credit score for it and are eligible according to lenders or trustees.
A debt consolidation loan doesn’t erase any of the debt so you’ll need to pay it back in full, but it can be a viable option for anyone that wants to avoid claiming bankruptcy or submitting a consumer proposal that will leave a permanent public record in a searchable database.
Lastly, you can claim bankruptcy in order to get rid of some of your debts.
While this can erase all of your debt and not just a portion of it, it’ll also take away some of your assets.
In a province like Alberta, you can actually save a lot of your assets, making this a very enticing option for those that have debts that are getting out of control.
If you’d like to learn more about consumer proposals and the available alternatives, don’t hesitate to get in touch with Bankruptcy Canada today.
Simply give us a call and we’ll be happy to arrange your free consultation.
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