We understand how overwhelming financial difficulties and debt can be; it’s more than just numbers on a piece of paper; it’s a constant source of stress and sleepless nights. The weight of unpaid bills and relentless calls from creditors can make it feel impossible to regain control of your life. If you’re feeling overwhelmed, know that you have options to regain control.
For over 28 years, BNA Debt Solutions has been helping Albertans find the right debt relief solution, guiding them with empathy and honesty. Led by trusted Licensed Insolvency Trustees (LITs), we offer personalized solutions tailored to your needs.
Both a consumer proposal and credit counselling are options to help manage debt, but a consumer proposal offers a debt repayment solution that significantly reduces debt, with the added benefit of being interest-free. In this blog, we’ll break down both options clearly to help you choose the best path forward. No pressure, just solutions.
Exploring Consumer Proposals: A Fresh Start
What Are Consumer Proposals and How Do They Help
A consumer proposal is a legal debt relief solution filed by a Licensed Insolvency Trustee (LIT), allowing you to settle up to 80% of your unsecured debts, including government debt (like CRA), over up to 5 years, interest-free. You can also make a lump sum payment to settle your consumer proposal early. Unlike credit counselling, consumer proposals offer the flexibility to pay off your debt early when you’re ready, making it a more manageable option as you take control of your future.
When facing debt payments, it can feel like there’s no way out, but a consumer proposal can be a step towards relief. It provides a clear and structured plan that allows you to reduce your debt, regain control, and start over without the pressure of high-interest rates or long repayment periods that often feel impossible to escape.
How Consumer Proposals Lift Your Financial Load
Filing a consumer proposal gives you immediate relief. The process can be completed quickly, often within a few weeks, and as soon as your Licensed Insolvency Trustee (LIT) files the proposal, creditors are legally bound to stop collection calls, lawsuits, and wage garnishments. This legal protection starts on the filing date, as governed by the Canadian Bankruptcy and Insolvency Act.
You can direct all creditor calls to us immediately, and any legal actions are halted from the date of filing. Imagine the peace of mind knowing those stressful calls will end. While creditors will review and vote on the proposal, the relief begins right away. Once the majority of creditors approve, the proposal becomes a legally binding agreement, ensuring a secure path forward.
The beauty of a consumer proposal is that it’s designed to fit your financial situation. Payments are based on what you can afford, and you can even pay off your debt earlier if you’re able to. A proposal covers everything, unlike credit counselling, which can leave certain debts, like CRA debts, out of the plan.
At BNA, we’re here to guide you through this process with a personalized, compassionate approach. You’re not alone; together, we’ll find the best solution to lift the burden of debt and help you move forward towards a brighter financial future.
What Credit Counselling Offers
What Credit Counselling Services Can Do for You
If you’re struggling with outstanding debt, a credit counselling agency might offer you a solution, but it’s important to know all your options. Not all debts qualify, such as CRA debts. This voluntary program, run by non-profit agencies, helps you repay 100% of your unsecured debts (such as credit cards and personal loans) over 3-5 years.
Interest relief is often negotiated, typically reducing it to around 5%, but you’re still required to pay off the full debt. It’s a long road, and without legal protection, unsecured creditors could continue their collection efforts. The impact on your credit score can be significant, showing an R9 during the program and an R7 credit rating for 2 years after completion.
It’s worth noting that a consumer proposal has a similar impact on your credit score, with an R9 during the process and an R7 for up to 3 years after. Therefore, both credit counselling and a consumer proposal will affect your credit significantly, though a consumer proposal may offer greater debt relief.
While credit counselling can offer some relief, it’s important to understand its limitations. If you owe large amounts or have certain debts, such as tax debts, this option might not provide the complete relief you seek. Consider exploring other solutions, such as a consumer proposal, which offers more flexibility and debt reduction.
How Credit Counselling Works
With credit counselling, you make regular payments to the non-profit credit counsellor, who then distributes them to your creditors. While the agency may negotiate for reduced interest rates, there’s no guarantee, and not all debts, such as tax debts, may qualify. This process lacks legal protection, and creditors may still pursue collection efforts, including calls and lawsuits.
At BNA Debt Solutions, we’re here to offer transparent guidance. If you’re looking to repay creditors more manageably, for many, consumer proposals provide broader debt coverage, especially when CRA debts are involved. We’ll help you understand your options, offering the support you deserve as you work toward a debt-free future.
Comparing Your Paths: Credit Counselling vs. Consumer Proposal
| Key Differences | Credit Counselling | Consumer Proposal |
| Description | Voluntary program via a non-profit agency. Repay 100% of unsecured debt over 3-5 years with ~5% interest. | Legal solution via Licensed Insolvency Trustee. Pay as low as 20% of unsecured debts over up to 5 years, interest-free. |
| Purpose | Manage debt, learn budgeting, negotiate lower interest rates or modified repayment plans. | Legally binding agreement to reduce debt owed, up to 80%. |
| Legal Status | Not a legal process; creditors’ participation is voluntary. | Formal process under the Bankruptcy and Insolvency Act, administered by LITs. |
| Debt Reduction | Limited; focuses on full repayment, possibly with reduced interest. | Significant reduction, up to 80% of debt in full settlement. |
| Legal Protection | No protection from creditors. | Stops collection calls, lawsuits, and wage garnishments during the process. |
| Interest Rates | Typically ~5%, but varies. | Usually interest-free. |
| Payments | Based on total debt, 100% repaid over 3-5 years, can be paid off early. | Based on affordability, it can be paid off early. |
| Requirements | All creditors must agree voluntarily; they may decline. | Must offer more than bankruptcy; majority creditor approval needed. |
| Credit Reporting | R9 during the program, then R7 for 2 years after. | R9 during program, then R7 for 3 years after, max 6 years total. |
Not sure if you qualify for a consumer proposal or counselling? Click here to get a free eligibility check.
Why Consumer Proposals Stand Out for Albertans
After exploring both options, you may be wondering why a consumer proposal stands out as a clear solution. When compared to credit counselling, consumer proposals offer a more manageable path to financial freedom, helping to reduce your debt balances with the added benefit of legal protection.
- Immediate Relief: Once a consumer proposal is filed, all collection calls, lawsuits, and wage garnishments stop. It’s an immediate break from the stress of dealing with creditors.
- Reduced Debt Load: With a consumer proposal, you may pay as low as 20% of your unsecured debts, and this reduced amount is interest-free. In contrast, credit counselling requires you to pay back the full amount, albeit with reduced interest.
- Flexible Payments: Payments are based on your financial situation, with terms up to 5 years. You also have the flexibility to pay off the debt earlier if you can.
- Credit Impact Clarity: The impact on your credit is clear and manageable. Your credit report will show an R9 credit rating during the proposal and an R7 for up to 3 years after, similar to credit counselling, but with significantly reduced debt.
We’ve assisted over 12,000 individuals on their journey to financial freedom, and we’re proud to have received over 200 reviews across platforms like Google and Trustpilot. These testimonials highlight our clear communication, empathy, and no-pressure approach. As a family-owned business, we’re committed to treating everyone we work with as an individual, not just a file number.
Myth-Buster: “A Proposal Ruins Your Credit for Years Longer”
Fact: Both a credit-counselling program and a consumer proposal show an R9 while you’re paying and convert to R7 after completion; the proposal for up to 3 years (to a maximum of 6 years from filing) and counselling for 2 years. In other words, the credit-report timeline is almost identical; the real difference is that a proposal slashes the amount you must repay.
When Credit Counselling Might Fit (But Why It’s Often Not Enough)
Credit counselling can be a helpful option for some, especially for those who need guidance on managing their debts. This voluntary program helps you repay 100% of your unsecured debts over 3-5 years, often with a reduced interest rate (~5%). It also includes valuable money management education and resources to help you manage your finances better.
However, credit counselling has its limitations:
- Not all debts qualify, such as CRA debts.
- There’s no legal protection, and creditors can still refuse to participate or continue collection efforts.
- It requires full repayment, unlike consumer proposals, where only a portion of the debt is repaid.
Smart Questions to ask if you’re still going to choose a Credit-Counselling Agency:
- Is the agency a registered non-profit with transparent fees?
- Do they disclose any set-up or monthly service charges up front?
- Are their counsellors accredited and in good standing?
- Will they give you everything in writing before you sign?
- Have you checked the FCAC’s list of reputable debt-help services? Learn more.
Credit counselling helps individuals with manageable debt who can commit to 3-5 years. and don’t need legal protection. But at BNA, we often recommend a consumer proposal for greater debt relief and a clearer path to financial freedom.
Real Stories from People We’ve Helped at BNA
At BNA Debt Solutions, we believe in treating every individual with the care and respect they deserve. The experiences of those who chose BNA, reflect our commitment to providing clear, empathetic guidance and personalized debt solutions.
Here’s what individuals who turned to BNA had to say:
“Truly amazing company. Managed to get all my debt and make it into easy, affordable monthly payments. They answered all my million questions and felt zero pressure. Very empathetic staff. Just a start to a fresh positive beginning.”—By Cynthia Braglin
“I recently had the pleasure of working with BNA and wanted to share my positive experience. From the moment I reached out for assistance with my financial situation, the team at BNA was incredibly supportive and knowledgeable.
Their dedication to helping clients achieve financial freedom is truly commendable. The personalized approach they took to understand my specific needs and create a tailored debt management plan was impressive. Not only did they provide effective solutions, but they also offered valuable financial advice that has helped me make better decisions for my future.
I am grateful for the professionalism and expertise demonstrated by the team at BNA Thanks to their guidance, I am now on a clear path towards financial stability. I highly recommend BNA to anyone seeking reliable and trustworthy debt management services.”—By Seifeladdl Zreba
” They were great in helping get my debt under control. Everything was explained clearly and in detail so I understood everything that was happening.”—By Meghan McKay
These reviews are just a glimpse of how we work at BNA: with empathy, transparency, and a focus on making the process as stress-free as possible. We take pride in being a partner you can trust during tough times.
Let BNA Debt Solutions Guide You to a Fresh Start
With over 28 years of experience and 200+ positive reviews, BNA Debt Solutions is here to help you reclaim your financial freedom. You’re a name, not a file number. We’re here to listen and guide you.
Want to understand how a consumer proposal would apply to your situation? Chat with a trustee— no strings attached.
As a BBB-accredited business led by Licensed Insolvency Trustees, you can trust us to provide expert, personalized debt relief.
Common Questions About Consumer Proposals and Credit Counselling
How does a consumer proposal affect my credit score?
A consumer proposal shows an R9 during the process, then an R7 for up to 3 years after completion (max 6 years from filing). This is similar to credit counselling, which also shows an R9 then R7 for 2 years. We explain the consumer proposal process and impact on your credit clearly during consultations.
Can I switch from credit counselling to a consumer proposal?
Yes, you can switch from credit counselling to a consumer proposal with the help of a Licensed Insolvency Trustee (LIT). Our LITs guide you smoothly through the transition, ensuring you’re supported as you move towards more effective debt relief options.
What debts are covered?
A consumer proposal covers all unsecured debts, including credit cards and CRA debts, interest-free. Credit counselling, however, may not include certain debts, such as tax debts. We clarify exactly what’s included in a consumer proposal upfront, so you know exactly where you stand.
What if I can’t keep up with payments?
If you can’t keep up with payments, a consumer proposal can be renegotiated with the help of your LIT, providing tailored debt repayment plans that better fit your financial situation. Credit counselling may lead to continued creditor actions if payments become unmanageable. BNA adjusts plans to help you stay on track.
How does debt consolidation differ from a consumer proposal?
Debt consolidation combines debts into one payment, often via a loan, but doesn’t reduce debt. A consumer proposal, filed by our LITs, cuts up to 80% of unsecured debts, interest-free, with legal protection. We clarify what’s best for you.
What is a debt consolidation loan?
A debt consolidation loan is a new credit to pay off multiple debts, requiring regular payments with interest. Unlike consumer proposals, it doesn’t reduce debt or stop creditor calls. Our consultations explore consumer proposals for greater debt relief.
