Consumer Proposal Nova Scotia

A Government Regulated Solution to Debt Problems

Are you feeling overwhelmed by debt? Struggling to make more than just the minimum payments each month? If so, you’re not alone. Many residents of Nova Scotia find themselves burdened by high-interest debt, making it difficult to make any progress in paying it off. But there is hope. In this article, we will explore the concept of a consumer proposal in Nova Scotia and how it can provide a viable solution to your debt problems.

The Rising Debt in Nova Scotia

In Nova Scotia, the average consumer debt (excluding mortgages) stands at $22,229, which is comparable to the national average. However, what sets Nova Scotia apart is its high delinquency rate, currently at 1.81%. This rate has increased by over 8% since 2016, indicating the growing financial challenges faced by Nova Scotians. With higher debt loads, the risk of defaulting on payments increases, leading to a cascade of financial and legal troubles.


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Understanding Consumer Proposals

A consumer proposal in Nova Scotia offers a way to tackle mounting debt and alleviate financial stress. It involves negotiating with creditors to reduce the debt amount or extend the repayment period. By reaching a settlement, you can put an end to collection calls, lawsuits, and the potential garnishment of your wages. Consumer proposals provide a more manageable debt load and a chance to regain control of your finances.

The Consumer Proposal Process in Nova Scotia

To embark on a consumer proposal journey in Nova Scotia, your first step is to consult a Licensed Insolvency Trustee. They will assess your situation and discuss the available options. If a consumer proposal is deemed suitable for your circumstances, the trustee will prepare a proposal to be presented to your creditors on your behalf.

Once your consumer proposal is filed, your creditors will have 45 days to consider it. During this period, you are relieved from making debt payments and are not charged any interest. If any creditor with at least a 25% claim on your debt requests a meeting of creditors, they can raise objections to your proposal. However, your trustee will represent you in this meeting, and the ultimate decision lies with the majority of creditors.

If a minimum of 51% of your creditors accepts your proposal, it will be approved by the court. You will then begin making monthly payments to settle the remaining debt amount. It is crucial to make these payments on time and in full each month. Failure to do so can result in default, jeopardizing the success of your consumer proposal.

Throughout the process, your trustee will guide you and provide budgeting strategies to help you stay on track. You will also be required to attend two credit counselling sessions as part of the consumer proposal process in Nova Scotia.

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Comparing Consumer Proposals and Bankruptcy

While both consumer proposals and bankruptcy can help you address your debt, there are important distinctions between the two.

Consumer Proposals

With a consumer proposal, your trustee works with you and your creditors to establish a repayment plan upfront. This plan outlines the exact amount you need to repay, providing clarity and certainty. The repayment amount may vary based on your income, meaning that any increase in income may require higher monthly payments. However, this also means that you can potentially complete your consumer proposal sooner and begin rebuilding your credit faster.


Bankruptcy, on the other hand, follows a set minimum duration. For a first bankruptcy without surplus income, you may be discharged in as little as nine months. However, if you have surplus income or it is your second bankruptcy, the minimum duration increases to 21 months or three years, respectively. Additionally, bankruptcy has a more significant impact on your credit rating. Equifax, the largest credit reporting agency in Canada, categorizes consumer proposals as an R7, which is considered better than bankruptcy (R9). The negative impact of bankruptcy on your credit report can last for as long as 6 to 8 years after being discharged.

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When faced with overwhelming debt in Nova Scotia, a consumer proposal can be a lifeline to financial freedom. It offers a structured plan to reduce your debt and regain control of your finances. By engaging a Licensed Insolvency Trustee, you can navigate the consumer proposal process and work towards a debt-free future. If you’re considering this option, reach out to a credit counsellor or a Licensed Insolvency Trustee in Nova Scotia to explore the best path for you.

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