How Much Do I Have to Offer My Creditors in a Consumer Proposal?
When weighing up the various debt relief solutions before you, a consumer proposal might be the logical choice.
Provided you don’t have debts in excess of $25,000, one of our licensed trustees will help you come up with a settlement figure that is pleasing to your creditor.
You will then have some amount of financial freedom, while still being able to retain your assets, and you will have fewer sleepless nights worrying about your debts too.
Your first step towards filing a consumer proposal should be booking a free consultation with one of our licensed trustees.
We will discuss the range of debt settlement options with you, and if a consumer proposal is the sensible next step, we will help you to come up with a figure that is pleasing to both you and your creditor.
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How Much Will You Have To Pay Your Creditor?
As your debt is unique to you, we cannot give you an exact figure until we know more about your situation and your creditor.
It will depend on your income, assets, and the size of your debt, but typically, but creditors usually expect around 30-50% of your debts to be repaid over a fixed amount of time within your consumer proposal.
When taking your consumer proposal into account, your creditor will consider a number of factors before agreeing to your offer.
At your consultation with us, we will talk about these factors with you, review your personal situation, and give you an idea of how much your creditors might be willing to accept in your consumer proposal.
Typically, these are the factors that might determine your chances of success with a consumer proposal.
The advantages over a bankruptcy
If the amount offered in your consumer proposal offers a greater return on your debt than bankruptcy to the creditor, then they might be willing to accept your offer.
On the flip side, if they were under the assumption that they might receive more if you filed for bankruptcy, chances are, they might turn down your claim.
Our trustees will help to determine what amount needs to be repaid, and in the consumer proposal, we will make it appear more attractive to the creditor than a bankruptcy.
Your history with debt
If you have filed for a consumer proposal or bankruptcy in the past, the creditor might expect you to pay more on your debt this time around.
So, while your offer of a consumer proposal might be accepted, the amount you would have to pay back each month could be increased.
With a consumer proposal, your account with the creditor would be open for up to five years.
If, after a cost analysis, the creditor decides that this is less cost-effective for them than a bankruptcy, perhaps because of the fees they would have to pay back, then your proposal might be turned down.
To help sway your creditor, we will come up with a cost breakdown to convince them that a consumer proposal will be more effective than bankruptcy with a repayment plan that is suitable for both them and yourself.
The level of risk
If your income is unstable or if your employment situation is uncertain, your creditor might question your ability to make the repayments offered in your consumer proposal.
In such a case, we would work with you on the debt solution that might be more beneficial to you.
However, if we decided that a consumer proposal could work, we would come up with a repayment figure that is realistic for you, and that might still be attractive to your creditor.
Filing A Successful Claim
Your creditors have 45 days from filing to decide if your consumer proposal is the right way forward with your debt.
With the help of a licensed trustee, we will increase your chances of your claim being accepted.
If it is, you would then be required to pay back money owed on the terms offered, as the consumer proposal would become legally binding between you both.
To find out more about filing a consumer proposal, and to discuss other debt solutions, contact us at 1-877-879-4770 or fill out our form, and book an appointment with one of our experienced licensed trustees to start your journey towards a debt-free life.
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