Consumer Proposal Saint John

Who Can File a Consumer Proposal?

A Consumer Proposal in Saint John is ideal for individuals who are unable to manage their current level of debt but have the capability to pay back a portion of it. The total debt, excluding the mortgage on a principal residence, must not exceed $250,000.

In certain situations, a joint Consumer Proposal can be filed when the individuals involved share the majority of the combined debt.

How Does a Consumer Proposal Work?

The process of filing a Consumer Proposal involves several steps:

Initial Assessment

The first step is to assess whether filing a proposal is the best course of action given your financial situation.

Drafting the Proposal

After the initial assessment, the proposal terms are discussed and drafted. The LIT will prepare the necessary documents to send to your creditors.

Filing the Proposal

The proposal is then officially filed with the regulator and your creditors. Once filed, the creditors have 45 days to vote on the proposal. Each creditor gets one vote per dollar owed. A majority of creditors (by dollars owed) must accept the proposal for it to proceed.

After Acceptance

Once the proposal is accepted, you will commence payments according to the terms of the proposal.

Counselling Sessions

You will be required to attend two counselling sessions that focus on budgeting, goal-setting, and managing credit effectively.

Certificate of Full Performance

After all payments and counselling are completed, a Certificate of Full Performance is issued. This means that you have successfully completed the proposal terms. Creditors are then notified and are legally barred from any further collection efforts.

Potential Payment Terms

A Consumer Proposal in Saint John provides flexibility in terms of payment options. Depending on your unique financial situation, you can choose from the following payment methods:

• Fixed payments: These can be weekly, bi-weekly, semi-monthly, or monthly, based on your payroll frequency.
• Variable payments: Ideal for those whose income fluctuates throughout the year. For example, seasonal workers can offer higher payments during work months and lower payments during the off-season.
• Increasing payments over time: Suitable for individuals who expect their income to increase over time.
• Decreasing payments over time: Suitable for individuals who expect their income to decrease over time.
• Lump sum payments: One or more lump sum payments can be offered. This is useful when family or friends can help you make a sizable offer to creditors.
• Payments from the sale of an asset: The proposal can be funded by offering all or a portion of the proceeds from the sale of an asset, such as a house, land, or investment.

Impact on Assets

People often wonder about the impact of a Consumer Proposal on their house or financed/leased vehicle. The answer depends on the type of debt involved – secured or unsecured.

Secured debt is attached to an asset, such as a mortgage against a house or a loan or lease against a vehicle. Unsecured debt is any debt not specifically attached to an asset, like credit cards, payday loans, personal loans, or personal tax debt.

If you wish to keep your mortgaged house or financed/leased vehicle, your proposal will state that you will continue making the required payments. If you cannot afford to keep or sell the house or vehicle for the amount owed, the proposal could state that the asset will be returned to the creditor, and the remaining debt will form part of the overall offer to unsecured creditors.

Advantages of a Consumer Proposal Over Bankruptcy

Choosing a Consumer Proposal in Saint John over bankruptcy offers several benefits:

• Clarity on the amount to be repaid;
• Retention of any future windfalls;
• Ability to file your own personal tax returns and keep any refunds provided there is no Canada Revenue Agency debt prior to filing;
• Lesser impact on credit reports;
• Ability to act as or become the director of a corporation;
• Continued bondability;
• No mandatory newspaper publication;
• Compliance with professional organizations or career/job concerns where bankruptcy could jeopardize membership, practice, or advancement.

Conclusions

A Consumer Proposal in Saint John is a practical tool for managing debt. It provides a structured approach to settling your debts while offering the flexibility to adjust to your specific financial circumstances. However, it’s crucial to consult with a Licensed Insolvency Trustee to explore all available options and choose the one best suited to your needs.

Remember, financial stability is achievable, and help is available. Don’t let the burden of debt keep you from enjoying the life you deserve.