Looking for assistance with BC Consumer Proposals?

Consumer Proposals are a favorable alternative to bankruptcy protection and unfortunately as underused as they are misunderstood. They are legally binding agreements between the courts and a licensed bankruptcy trustee who acts on behalf of the applicant. Consumer Proposals are typically considered to be best suited for people with personal debt of between $5,000 and $75,000 who have a stable income and are able to make regular payments.

BC Consumer Proposal Advantages

BC consumer proposals

Bankruptcy is an option no person should enter into lightly, significant advantages can be gained from opting instead for a Proposal. First, wage garnishments immediately cease upon agreement. By agreeing to the terms of your arrangement, creditors may only receive payments in the amounts and timing stipulated. Similarly they may take no additional legal action against you during the repayment period. Second, from the date of the proposal all interest is frozen, which is often the main challenge for applicants, especially when credit card debt is involved. Third, the maximum repayment term is five years, meaning that you will be debt free much more quickly than many other options allow. Finally, creditors will very often not only agree to your terms, but to terms that include only a portion of the principal debt. They will usually receive a greater portion of the amount owed than in you were to apply for bankruptcy, meaning that the proposal is beneficial for everyone involved.

How do I Make a BC Consumer Proposal Happen?

The first step is to contact a bankruptcy trustee who can counsel you on the different options available. If a Consumer Proposal is right for you, the trustee and the court will approach your creditors looking to gain their consent. If more than fifty percent of the crediting parties agree to the terms presented, then the court will find that the terms are fair and create a binding agreement. For more information, see the Bankruptcy and Insolvency Act. If there are any creditors who voted to reject your proposal, but a majority was achieved, the dissenting creditors will be bound to your terms despite their lack of agreement.

Impact on Credit Ratings

During the repayment period your credit records will indicated that there in a consumer proposal in place, which is favorable to a bankruptcy. The effect that this has on your ability to use that credit rating varies from case to case. Once the agreed upon terms have completed, a note will remain on your credit file for seven years.

What if I can’t Pay for a Period?

Up to two payments during the repayment period can be missed with no penalty. The payments are simply applied to the end of the term. Any more than two missed payments causes the agreement that’s been made to be annulled and allows the creditors to take whatever reasonable actions they deem necessary, including collections and wage garnishment.

BC Consumer Propoals

Approved for a BC Consumer Proposal! What now?

If there are no objections, the court will approve the agreement within fifteen days. From that point on the only contact that you’ll have with your creditors will be the regular agreed-upon payments. It’s smooth sailing from there as long as both sides keep up with their terms of the contract.

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