How To Apply For A Consumer Proposal In New Brunswick

Applying For A Consumer Proposal In New Brunswick

How To Apply For A Consumer Proposal In New BrunswickIn the realm of unmanageable debts and financial crises, a consumer proposal can be a lifeline. It’s a legally binding process administered by a Licensed Insolvency Trustee (LIT). This guide offers a comprehensive look at How To Apply For A Consumer Proposal In New Brunswick.

Pre-requisites of a Consumer Proposal

Before proceeding, it’s important to understand the eligibility criteria for applying for a consumer proposal:

  1. You must be unable to pay your debts as they become due.
  2. The total debt should not exceed $250,000 (excluding mortgage on your primary residence).
  3. Must have a stable income to make the proposal payments.

Step 1: Finding a Licensed Insolvency Trustee (LIT)

Identifying a trustworthy and experienced LIT is the first crucial step in Applying for a Consumer Proposal in New Brunswick. They will guide you through the entire process, explaining each step and ensuring there’s no judgement, just honest help.

Step 2: Assessment of Financial Situation

The LIT will conduct a thorough review of your financial situation. This includes income, expenses, debts, and assets. This information will be used to determine if a consumer proposal is the best solution for you.

Step 3: Crafting the Proposal

The LIT will work with you to design a proposal that you can afford and that will be acceptable to your creditors. The goal here is to offer a repayment plan that is less than the total amount of your debts.

Step 4: Filing the Proposal

The LIT will file the proposal with the Office of the Superintendent of Bankruptcy (OSB). Once filed, all actions by creditors should stop – this includes lawsuits, wage garnishments, and contact for collection of debts.

Step 5: Voting by Creditors

Creditors have 45 days to vote on the proposal. If the majority of creditors accept the proposal, all are bound by it. If rejected, there are options to amend the proposal or consider other solutions.

Step 6: Meeting of Creditors

In some cases, a meeting of creditors may be called. This would occur if creditors accounting for at least 25% of the total debt request a meeting. The LIT will guide you through this process, if necessary.

Step 7: Approval of Consumer Proposal

If the proposal is accepted by the creditors and the court, you will begin making payments to the LIT based on the terms of the proposal. These payments are then distributed to your creditors.

Step 8: Completion of Proposal

After all payments are made and the terms of the proposal are met, you will be legally released from the debts included in the proposal.

Benefits of a Consumer Proposal

A consumer proposal comes with several benefits:

  • You retain your assets.
  • Interest stops accruing on your debts.
  • Legal protection from creditors.
  • One affordable monthly payment.

Conclusion

Making the decision to file a consumer proposal can feel like a massive weight has been lifted off your shoulders. It’s a process that can provide much-needed financial relief and a fresh start. Remember, the most difficult part is often making the first call. With the support of a LIT and user-friendly technology, the process can become much more manageable.

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