Consumer Debt Proposal Service

Financial consumer proposals

At Charles Advisory Services we understand that declaring personal bankruptcy is never your only choice when faced with unmanageable debt. That’s why we often recommend a consumer proposal to those who are looking for a solution that helps protect their assets while making their debt payments easier to handle. We can prepare a consumer proposal to lessen your monthly payments and help you focus on your long-term financial goals.

Consumer proposals are designed to help you manage your debt and pay it off as quickly as possible. We will review your overall debt and present a proposal to your creditors with the goal of lowering your monthly payments or reducing the overall amount owed. We will ensure the terms they agree to are favourable, and will allow you to meet your financial goals. Our team of knowledgeable insolvency experts will protect your interests and find the best solutions to help you become debt free.

WHAT IS A CONSUMER PROPOSAL?

Consumer proposals are offers for modified payments we make to your creditors on your behalf. Offers can vary from making lower payments over a longer period of time, to paying only a percentage of what you owe. Once your consumer proposal is filed, all aggressive actions from your creditors cease. Upon its approval, you can concentrate on paying back your debt under the terms of your proposal.

We file all the paperwork, make direct contact with your creditors, and even handle your payments for you. Our goal is to make the process as smooth and as stress-free as possible.

Filing a consumer proposal as part of your debt management plan has many benefits, including:

  • Monthly payments are fixed and are often reduced
  • You stop paying interest
  • Creditors will cease aggressive actions and unwanted contact
  • Accepted proposals are legally binding

Best of all, you’ll avoid bankruptcy and the severe credit consequences bankruptcy brings.

CONSUMER PROPOSAL VS. BANKRUPTCY

Bankruptcy and consumer proposals provide protection from the courts when you are unable to repay your debts or have become insolvent. However, while bankruptcy forces creditors to accept lower payments or no payment) for the money they are owed, a consumer proposal presents an offer to the collective creditors that either lowers the amount owed or lessens the burden on you, with a revised payment schedule.

With a proposal, the creditors have the option to accept the proposal, make amendments or refuse your proposal. If accepted or amended, you will follow the new repayment plan until your debt is paid off. If they refuse your proposal it might be in your best interest to consider bankruptcy. A consumer proposal is generally the preferred option, since it won’t have as much of an impact on your credit and assets.

Consumer Proposal in Toronto

A consumer proposal offers you the chance to pay off your debt in manageable monthly payments, stop interest and end harassing calls from creditors. It will allow you to maintain your assets and continue to grow your wealth. Our team will work hard to get the best possible agreement from your creditors to lessen your debt burden as quickly as possible. Give us a call to set up your appointment at (416) 915-9007 or click here.

Commonly Asked Questions

What is a consumer proposal?

A consumer proposal is administered by a Licensed Insolvency Trustee to develop an offer to make paying your debt more manageable. Proposals usually offer creditors a percentage of what you owe, extend the time allowed to pay your debt, or both.

Where to get a consumer proposal?

A Consumer Proposal is provided through a Licensed Insolvency Trustee under the Bankruptcy and Insolvency Act.

How does a consumer proposal work?

A consumer proposal is developed by your trustee who:

  • Determines a Payment Plan: An assessment is made of the money owed and your income. From there, the trustee determines how much money you can afford to pay. In some cases, the trustee might decide you can’t afford payments and recommend you file for bankruptcy. If your monthly cash flow can support payments, they will prepare the proposal. The trustee will work with your best interests in mind, looking for reduced balances and stopping interest payments. Proposal payments are spread over a period of no more than 60 months. The more you can afford to pay each month, the shorter the term. A percentage of the payments go towards the fees to manage and administer the proposal and payments.
  • Files the Consumer Proposal: Next, your trustee will file the proposal with your creditors. They then vote on whether they agree to the terms. A copy of the proposal is also sent to the government. Once filed, all procedures to collect your debt by creditors must stop. Creditors will consider the proposal and can:
    • Accept your terms
    • Reject your terms
    • Reject your terms and ask for a creditors meeting
    • Ignore the proposal

For a creditors meeting to be held, more than 25% of your creditors must request a meeting. At the meeting, a formal vote is held, and you need more than half of the voting creditors with the highest balance owed to vote in favour of the proposal for it to be approved. If the vote is approved, then even those who do not vote yes will have to follow the proposal deal. In most cases, the proposal goes through as most creditors view receiving a portion of their money better than receiving nothing at all.

What happens in a consumer proposal?

Once approved, you are required to make all agreed-upon payments. All payments are fixed at a certain amount each month, making it easier to manage. You do have the option to pay more each month but cannot go below the required amount. However, you do have the option to defer up to two payments throughout the entire term of your proposal. Keep in mind if you miss three payments, your credit returns to its original standing, including the full balance (less what you’ve paid during the proposal) and interest rates. You can also opt to pay a lump sum to complete the proposal. You also must attend two credit counselling sessions to help you become better at money management.

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