Consumer Proposal Vancouver

The Process of Filing a Consumer Proposal

Administered by a Licensed Insolvency Trustee (LIT), a Consumer Proposal involves several steps:

1. Assessment: The LIT discusses your financial situation to determine the feasibility of a Consumer Proposal.
2. Proposal Drafting: Based on your ability to repay, a proposal is drafted for your creditors.
3. Filing the Proposal: The LIT files the proposal with the Office of the Superintendent of Bankruptcy (OSB).
4. Proposal Review: Creditors have 45 days to review and either accept or reject the proposal.
5. Completion: If accepted, you begin making payments as per the agreed terms in the proposal.

Key Benefits of a Consumer Proposal

Consumer Proposals in Vancouver offer several benefits:

1. Debt Reduction: It significantly reduces the total debt you owe to your creditors.
2. Asset Protection: It allows you to keep your assets while eliminating your debts.
3. Creditor Protection: It offers protection from collection agencies and wage garnishments.
4. No Interest Charges: No additional interest is charged during a Consumer Proposal.
5. Avoidance of Bankruptcy: It provides a final way to avoid bankruptcy.

Potential Drawbacks of a Consumer Proposal

While the benefits of a Consumer Proposal are significant, it’s equally crucial to understand the potential drawbacks:

1. Public Record: A Consumer Proposal is a permanent public record.
2. Approval Requirement: The Court must approve the proposal.
3. Potential Asset Sale: You may need to sell some of your assets.
4. Missed Payments: If you miss more than two payments, you may need to file for bankruptcy.

Understanding Eligibility for a Consumer Proposal

To qualify for a Consumer Proposal in British Columbia, you must meet specific criteria:

1. You must be insolvent but capable of making monthly payments to repay a portion of your debt.
2. The total of your unsecured debts must not exceed $250,000, excluding mortgages on your principal residence.
3. You must not have any previous proposal proceedings open.

The Impact on Your Credit Score

Filing a Consumer Proposal will result in an R7 credit rating, which signifies a settlement with creditors. This notation remains on your credit report for up to three years from the date of your final proposal payment.

Conclusion: Is a Consumer Proposal Right for You?

While a Consumer Proposal can offer a viable solution for many, it’s not the best option for everyone. To determine the best course of action, speak with a professionally trained Credit Counsellor or a Licensed Insolvency Trustee. Remember, asking for help with debt is okay.

For more information regarding Consumer Proposals in Vancouver, consider contacting a local LIT or Credit Counsellor. They can provide you with a thorough understanding of the process and help you decide whether this is the right path to a debt-free future.

Contact Information

To learn more about Consumer Proposals, feel free to contact us at 604-757-0596. You can also reach us online. Our appointments are free, non-judgmental, and completely confidential.