How To File A Consumer Proposal
Consumer proposal(s) may be the option for you if you need some time to pay off debts, or you can not afford the whole amount for each month.
Steps:
1. Determine if this is the best option that suits you. Consumer proposals are for people who do not qualify for a bank loan, would not file for a bankruptcy, those who can make payments to creditors but need certain time to do so. Also suited for people with debts maximum of $75,000.
2. Gather facts about your financial situation. Determine how much you owe and how much you can pay monthly. Compare that payment to the sum amount of your unsecured debts (personal loans and credit cards) to know how many you will have to pay. Secured creditors are excluded from this proposal. 3. Have a licensed trustee prepare the proposal for you, and send it to everyone you owe money. 4. Most creditors accept consumer proposals because they would rather have something than nothing in a bankruptcy. Your creditors have 45 days to approve or decline your proposal. If 25% of your creditors decline, your trustee will have a meeting with your creditors. You MUST attend the meeting. 5. If there are no objections after fifteen days, your proposal will be approved by the court. From that day forward, you and your creditors will be locked into the terms of proposal. The filing date, interest is frozen and creditors can not take legal actions against you. 6. Start your payment. You can miss only up to 2 payments. Your trustee will move those payments to the end of the proposal. If you miss 3, the proposal collapses, and will annulled by the court. If this occurs, interest charges are applied to your debts back to the day you filed your proposal. 7. Rebuild your credit. Follow your proposal, that will apear on your credit record for 7 years from the filing date. Which Debts Can I Include? Consumer proposal is created to deal with unsecured debts (money owed without collateral) such as: · Credit Cards · Income Taxes · Personal Loans · Lines of Credit Secured debts (mortgage, car loan) are mostly excluded from consumer proposal. However, case is exempted when you owe more than the value of the item over what the creditor holds. What Does It Cost? Superintendent of Bankruptcy will be the one to set the payment for your trustee. In most cases, your trustee will be paid, out of the proceeds of the consumer proposal. Example, if you offered your creditors 50 payments of $250 to retire $25,000 amount of debt, your total payments will be $12,500. Proposal fee will be computed from that given. What do I do now? We recommend you to make an appointment with a licensed bankruptcy trustee if you are experiencing financial difficulty, and are thinking that you can settle everything with creditors in the form of a consumer proposal. A licensed trustee is the only one who can assist you in filing a proposal.
| 