Consumer Proposal Defined
A consumer proposal is probably one of the best kept secrets in the world of debt repayment; and like most secrets, there is a great deal of misunderstanding about what they are, who can file them and how they work.
Simply put, a consumer proposal is a forced settlement that is put on your creditors that can only be obtained through the assistance of a federally licensed debt restructuring company like Bromwich & Smith. When you file a consumer proposal, all of your creditors actions are immediately stopped (they can no longer call you, or continue a lawsuit, garnishee your wages or continue to hold a freeze on your bank account). Once the consumer proposal is filed and accepted, all of your creditors are immediately bound by the repayment terms of the consumer proposal that Bromwich & Smith files with the federal government on your behalf.
To learn more about a Consumer Proposal and how Bromwich & Smith can help you eliminate your debt, please watch this short and informative video below:
When you file a consumer proposal with Bromwich & Smith, you don’t pay back all of the debt that you owe. In fact, most of the time you are only paying back a small percentage of your debt – without any interest payable. The exact percentage of the debt you have to pay back depends upon your unique situation (how much money you make, the number of dependants you have, the assets you own, etc.). You need to speak with one of our counsellors to determine what your specific consumer proposal will look like.
All you have to do is make the payments on your consumer proposal, all the negotiation and correspondence is done by Bromwich & Smith. And don’t worry, the majority of the consumer proposals filed by Bromwich & Smith are accepted and we don’t need to have a meeting with your creditors or seek the approval of the Court.
When you use the services of Bromwich & Smith to file your consumer proposal there is no cost to you, as we are an officer of the court and are paid through a government tariff.
Once the consumer proposal is filed with the federal government the creditors have 45 days to prove to us how much you owe them and to request that we call a meeting to vote on the proposal (if they want to have a meeting). If 25% of the dollar value of the proven creditors request a meeting, we will call one and have a vote to see if the proposal is accepted by the majority of creditors in dollar value (each dollar you owe is worth one vote either for or against the proposal).
If no one requests a meeting within 45 days, your consumer proposal is deemed creditor accepted. Once the proposal is accepted or deemed accepted we wait 15 days to see if a creditor or the federal government directs us to have your consumer proposal reviewed and approved by the court. If no one requests that we have the proposal reviewed by the court, your proposal is deemed court approved (which is usually what happens).
If you are speaking with a provincially licensed debt restructuring company (usually licensed through Service Alberta) for help in filing a consumer proposal, you need to understand that the company you are speaking with cannot help you file a consumer proposal. What that company can do is provide you with information about consumer proposals (likely for a consultation fee), but ultimately they will need to refer you to a licensed insolvency trustee like Bromwich & Smith who will file the consumer proposal on your behalf. If the company you are speaking to does not refer you to Bromwich & Smith for your consumer proposal filing needs you might want to ask them why that is.
You need to use Bromwich & Smith, as a licensed insolvency and proposal administrator, to file your consumer proposal because, as an officer of the court (representing no specific party), we complete a detailed report and provide our expert analysis to the creditors outlining how the consumer proposal you are offering is the best option for both you and your creditors. We help negotiate a win-win scenario.
Our consumer proposals are usually set up as a single, affordable monthly payment that is based upon your budget, and they will never last longer than 60 months (5 years). We also help file consumer proposals that are shorter than 5 years, and we can even help you create a consumer proposal that offers a single, lump sum payment (if a friend or family member is willing to assist you, or if you have an exempt asset that you would like to redeem, such as an RRSP (see section on Sell Assets)).
You may have read some company’s ads claiming that they can settle your debt at a specific percentage; you may have even seen some websites that provide a calculator to determine your consumer proposal. You will never read or hear of such debt settlement percentage claims from Bromwich & Smith, nor will you find a calculator on our website that claims to be able to determine a consumer proposal for you. You won’t find these things when you deal with Bromwich & Smith because our values won’t allow us to present things this way.
We could review the over 40+ years of combined debt restructuring services that Bromwich & Smith has been providing to Albertans, and from that review we could determine the average percentage of savings that we have helped negotiate, and then we could advertise this number . But does this number really represent anybody? Does it represent you or your specific situation? No, it is simply a statistical number.
At Bromwich & Smith we know that you are not a number, you are not a statistic. You are a good person with a unique set of circumstances, and you deserve to be provided with impartial and unbiased information and commentary based upon your unique situation. You don’t deserve to be treated like a statistic, and so you shouldn’t be given statistical percentages that can’t be applied directly to your unique debt situation.
When you file a consumer proposal with Bromwich & Smith you are dealing directly with human beings that understand the emotional complexity of debt restructuring, as well as all of the ins-and-outs of how to structure a consumer proposal that will work according to your budget. When you choose Bromwich & Smith you won’t be dealing with a mathematical calculator, you will be dealing with a team of dedicated professionals focused on both your emotional and financial wellbeing.
If you are looking for a one-size-fits-all calculator approach when structuring your consumer proposal, than Bromwich & Smith is not for you. If, however, you are looking for a collaborative approach to structuring your consumer proposal, an approach that combines the strength of 40+ years of team experience with the personal care of individual counselling services, Bromwich & Smith is your first choice. Speak to one of our counsellors today.