A consumer proposal may help you get the fresh financial start you deserve if you’re battling excessive debt and fear you’ll never be able to stop living from one expense to the next. The amount you must pay in complete settlement of the debt reduces by a significant amount, which is one of the major advantages of submitting a consumer proposal.
Additionally, your creditors can no longer go after you for money or try to recover past-due debts once the Licensed Insolvency Trustee has filed your Consumer Proposal; they can only get in touch with the trustee. Here are some key facts to learn about a consumer proposal.
There is a free, confidential consultation before the consumer proposal process begins.
Licensed Insolvency Trustees offer a free, no-obligation consultation to examine your financial circumstances, comprehend your goals, and ascertain the debt relief choices that are open to you. They’ll thoroughly explain each option and an unbiased assessment of which will best suit your needs. You can be sure there are no additional costs or hidden fees because the trustee’s fees are regulated and legislated. No “lump amount” or “up front” fees are needed to begin a consumer proposal Canada.
The requirements are relatively simple.
You must be unable to pay your monthly debt commitments when they are due and owe less than $250,000, excluding the mortgage on your primary house. Anyone who is bankrupt is also eligible to submit a consumer proposal.
Each dollar owed by a creditor represents one vote when deciding whether to accept the plan.
If there is no need for a conference of creditors, a consumer proposal is presumed approved 45 days after submission. A meeting of creditors is necessary if 25% of the confirmed creditors ask for one within 45 days of the Consumer Proposal’s filing. The Consumer Proposal is put to the vote during the meeting, and it is accepted if a majority approves the Consumer Proposal.
If it works within your budget, you can amend rejected consumer proposals.
If necessary, the consumer proposal may be changed or updated to get creditor approval. Suppose your creditors decide to reject your consumer proposal. In that case, the licensed insolvency trustee may speak with them to determine the changes required to make the proposal agreeable to the creditors.
Any changes, meanwhile, must still be paid within the maximum five-year time frame and reflect payments you can raise based on your current financial standing. The Consumer Proposal will be rejected if negotiations with your creditors are unsuccessful, leaving bankruptcy your only choice.
Two financial counseling meetings are required for you to finish your consumer proposal.
As part of the Consumer Proposal, two credit counseling sessions emphasizing budgeting and improving your credit score are necessary. The main goals of financial counseling sessions are to teach you how to plan and achieve future financial goals and develop your budgeting abilities.
These are a requirement of your consumer proposal and a crucial step in the bankruptcy procedure. You will not be dismissed from your debts if you do not finish your counseling sessions within the prescribed timeframe.