Finding a debt solution that works for you doesn’t have to be difficult. There are numerous debt management options that can accelerate the time it takes to become debt-free and regain control of your credit.
Filing a Consumer Proposal is often one of the best ways to navigate your way out of debt. Like any financial undertaking, it is important to be well-informed about what the process means for you.
That’s why we are happy to share everything there is to know about filing a Consumer Proposal in Alberta, including the answers to common questions we receive from clients. Get on your way to a debt-free future and learn more about your options today.
A Consumer Proposal is a legal debt settlement agreement between you and your creditors that is facilitated by a Licensed Insolvency Trustee (also known as a Trustee, or LIT).
Individuals who do not have the ability to pay both the required interest and principal to become debt free on their own. In Canada, there are some basic requirements.
If you owe more than $250,000 in debts, you could be eligible for a Division I Proposal. Contact us to discuss what this option means for you.
If you owe more than $250,000 in debts, you could be eligible for a Division I Proposal. Contact us to discuss what this option means for you or check out this link to learn more about the process of filing a Division I Proposal.
There are numerous advantages to a Consumer Proposal, which make it an attractive option for those facing serious debt.
There are also disadvantages to a Consumer Proposal. The biggest one is that it typically takes longer to complete as compared to bankruptcy. However, this can mean that the monthly payments are lower than what you would be required to pay over a shorter period in a bankruptcy.
A Licensed Insolvency Trustee also known as a Trustee or his administrator, licensed by the Office of the Superintendent of Bankruptcy. This means Trustees (including those at BNA) are federally regulated with oversight from various regulatory bodies to ensure we are abiding by a strong code of ethics. Trustees are the only individuals licensed to file and administer Consumer Proposals and Bankruptcies.
The Trustee is responsible for providing a detailed review of your specific circumstances and educate you on your options for debt relief. Most Trustees provide an initial consultation for free. It is important to be cautious if you are being asked for payment, as this could mean you are not dealing with a Trustee, but rather an unlicensed debt consultant.
They are NOT your legal representative or fiduciary (a person who holds a legal or ethical relationship of trust with one or more other parties).
While there are many different types of unsecured debts, some are more common than others. While it’s not always black-and-white which debts can be included in a Consumer Proposal, the following examples of unsecured debt are typically eligible:
Although it is a very useful solution, there are specific types of unsecured debts that a Consumer Proposal cannot service. This includes:
Your Licensed Insolvency Trustee will review your unique circumstances and recommend a reasonable starting offer for your Consumer Proposal based on various factors such as your income, assets, and household size. Your monthly budget is also important to assess how much money you can allocate to debt repayment each month for the next 5 years.
This monthly payment will cover all of your unsecured debt, and eliminate the payments you are currently making. You are required to maintain your secured debt payments, such as your mortgage or car payments, if you wish to keep those assets.
Payments are made to your Trustee and held In Trust and are generally distributed to your creditors once a year. Each creditor will receive a percentage of the amount In Trust, based on the amounts owed to each creditor.