The Consumer Proposal
The Consumer Proposal allows you to keep your assets in spite of your financial difficulties.
Are you unable to pay off your debts and want to avoid personal bankruptcy? The consumer proposal is the best solution to your debt. It allows you to keep your property despite your financial problems and most of the time offers the possibility of repaying only part of your debts, according to the agreement with your creditors. You group your debts to the various creditors in a single payment, without interest, and negotiate the amount of this payment downwards. Depending on your budget and the agreement with your creditors, you repay all or part of the amount over a period which, as provided by law, can extend up to sixty months.
What is the consumer proposal?
This is a payment arrangement permitted by the Bankruptcy and Insolvency Act, which allows you to spread your payments over a maximum period of 60 months.
Who can make a consumer proposal?
Anyone with less than $250,000 in debt. However, the value of your principal residence mortgage doesn’t count in calculating this amount. You must also be in a situation of bankruptcy or be insolvent.
Being insolvent means:
- You are not in bankruptcy.
- The total amount of your debt is over $1,000.
- You reside or own property in Canada.
- You find yourself in one of these situations:
- Being unable to pay your debts on the due dates; or
- Having stopped paying current bills or debts; or
- The value of all of your debts (liabilities) is greater than the property you have in your possession (assets).
Questions to ask yourself…
We can help you
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What are the benefits?
The consumer proposal prevents you from declaring bankruptcy. This will keep your assets safe while being protected from foreclosures and harassment from your creditors. You will also avoid being sued by them because of the non-repayment of your debts.
Consumer Proposal Payments are determined based on your ability to pay and do not include any interest. It’s also possible to make a proposal that allows you to repay only part of your debts to reduce the amount of the monthly payments.
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What is the role of the Licensed Insolvency Trustee?
To file a consumer proposal, you must do business with a licensed insolvency trustee. He will assess your financial situation. He will then help you write a consumer proposal that you can present to your creditors.
Your bankruptcy trustee is also responsible for bringing your creditors together and negotiating an agreement with them, if necessary.
Your bankruptcy trustee costs for the services rendered are included in the agreement with your creditors. You will therefore pay it as you repay your debts.
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What are the impacts of a consumer proposal on my credit rating?
The impacts on your credit rating are significant and will affect a total period of 6 years including the duration of the proposal. The debtor who makes a consumer proposal retains his property, but must nevertheless rebuild his credit report following the full implementation of his proposal.
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How to start the process?
After evaluating your financial situation, our advisers will submit your proposal to your creditors who will then have 45 days to respond. They will then have the choice of accepting the proposal or of requesting a creditors’ meeting.
For a meeting to take place, it must be requested by more than 25% of your creditors. Your bankruptcy trustee will then try to negotiate an agreement with them. Your proposal is accepted if the majority of your creditors are in favor of it. Otherwise, they may ask you to repay your debts on their own terms, putting you at risk of going bankrupt.
If your proposal is accepted, your creditors then have 15 days to request a review. If no request has been made after the 15 days, your proposal will be approved by the court.
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Make an appointment with one of our advisors
During the process, our team of advisors can also provide advice to help you get your finances back on track. The goal is not to judge you, but rather to provide you with tools to avoid falling back into the same situation. We will also help you to better manage your budget so that you do not fall back into an insolvency process.
About Labelle Marquis
For over 35 years, Labelle Marquis specializes in the field of insolvency. Our team is at your disposal to help you find solutions to straighten your finances. Whether for personal bankruptcy, a business bankruptcy, a consumer proposal or debt consolidation, we will be able to support you throughout the process.
If you would like to have support in submitting your consumer proposal, talk to us now. We will take the time to answer all your questions! Contact us for an appointment or for more information : 514-748-7522 or Toll Free: 1-855-748-7522
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