Consumer Proposal Prince George

The Process of Filing a Consumer Proposal

The process begins with paying an initial setup fee. If the proposal is accepted by your creditors, you will pay the remaining balance. Additionally, the trustee will retain 20% of your future payments as an administration fee.

To make the proposal legally binding, creditors who hold the majority of your debt must consent to the arrangement. If they agree, you’re obligated to repay the agreed amount within a maximum term of five years.

Advantages of Filing a Consumer Proposal

There are several benefits to filing a Consumer Proposal:

1. Debt reduction: The amount you owe to your creditors can be significantly reduced.
2. Debt consolidation: If you have a stable income and sufficient budget for monthly payments, a Consumer Proposal can be a useful consolidation method.
3. Avoiding bankruptcy: A Consumer Proposal is one of the last resorts to avert bankruptcy.

Disadvantages of Filing a Consumer Proposal

However, there are some drawbacks to consider:

1. Public record: Filing a Consumer Proposal is not a private affair. It is registered as a permanent public record.
2. Creditors’ approval: Creditors can choose to reject the proposal, and you might have to offer additional funds to persuade them to proceed.
3. Risk to assets and professional licenses: You might need to sell some of your assets, and certain professional licenses could be at risk.

Dealing with Debt: The Way Forward

Remember, there’s life beyond debt for everyone. With the right advice and support, you can navigate your financial difficulties and regain control.

Beware of Debt Rip-Offs

Unfortunately, Consumer Proposals have become a method for some companies to exploit vulnerable Canadians. Always ensure you’re dealing with a government-licensed bankruptcy trustee when filing a Consumer Proposal.

How to Avoid Getting Scammed

Here are some tips to avoid falling into the trap of debt scams:

1. Consult a non-profit Credit Counsellor: They can help you understand your financial situation and explore all possible solutions.
2. Pay only to a licensed bankruptcy trustee: By law, only they are allowed to charge for Consumer Proposals.
3. Understand the compensation of your advisor: Ensure the advice you receive is in your best interest, not theirs.

Impact of a Consumer Proposal on Credit

A Consumer Proposal can affect your credit score. A special notation is placed on your credit report, and your creditors may report a “7” rating, meaning payments are received through a third party.

Maintaining a good payment history on any secured debts can assist in rebuilding your credit more quickly after the proposal.

Need More Information on Consumer Proposals in Prince George?

Choosing a Consumer Proposal is a significant decision, and it may not be the best option for everyone. At Prince George, our professionally certified Credit Counsellors are available to help you understand your options and make the best choice for your situation.