Consumer Proposals For Individuals
Learn about how a consumer proposal can help you eliminate debt and how it can help you take back control of your finances:
Here's how a Consumer Proposal works:
●We will examine your current financial situation with you.
●Based on your situation, we will help you determine what you can afford to pay to your creditors.
●We will negotiate with your creditors for you, offering an amount and payment plan based on what you can afford and not what creditors are demanding. Amount of settlement is usually only a percentage of what you originally owed.
●All creditors are legally forced into a settlement, even if not all agree.
●ALL creditor actions are immediately stopped, including collections, wage garnishees, and other legal actions.
●All interest charges stop.
●You pay one affordable monthly payment.
●A consumer proposal does not touch your assets.
●There are No Fee Payments from you. We are paid by a government tariff and any fees are included in the total proposal amount offered to your creditors.
1. A proposal may provide for an extension of time for payment, reductions in interest rates, and typically provides for repayment of less than the total of all debt owing. A proposal must be made to all unsecured creditors generally, must be completed within five years and must provide that preferred creditors (child support, rent arrears, Administrator fees) are paid before other creditors. Proposals can include student loan debts.
2. An individual whose total debts do not exceed $250,000, excluding mortgages on a principal residence, can make a consumer proposal to creditors. If the total debts exceed $250,000 or if you want bankruptcy to be the consequence of the failure of a proposal then a Division I proposal can be filed.
3. An individual who wishes to make a proposal must obtain the assistance of an Administrator. Bromwich & Smith Inc as the Administrator will prepare and file the proposal. Once the proposal is filed, unsecured creditors cannot take any collection action against you. However, secured creditors are not prevented from realizing on their security.
4. The Administrator will prepare a report on the debtor’s financial affairs and send this report to all creditors so that they may assess the proposal. Unlike bankruptcy, you do not turn control of your non exempt assets over to a Trustee.
5. Two counselling sessions must be attended. The first counselling session is held after about two months and the second session is held after six months the filing of a proposal.
6. In case of a consumer proposal, there will usually be no meeting of creditors. If no meeting is requested by creditors within 45 days of the filing of the consumer proposal, it is deemed to be accepted by the creditors. If a meeting is requested by creditors, it is held within a further 21 days and the proposal is voted on at the meeting.
7. An accepted proposal is binding on all unsecured creditors.
8. All monies in a proposal are paid to the Administrator who then makes distributions to unsecured creditors at regular intervals.
9. When a proposal is fully performed, the Administrator will issue a completion certificate to you.
10. If a consumer proposal is not approved, the debtor is not automatically in bankruptcy. The debtor can make a revised proposal if so desired. If a debtor is in default on the performance of the consumer proposal, the consumer proposal may be annulled and, if it is not revived, the debtor cannot make another consumer proposal.
11. A Division I proposal is similar to a consumer proposal but a meeting of creditors is mandatory and bankruptcy is the automatic consequence of a rejection by creditors. The Division I proposal can offer repayment terms longer than five years. Further details of the specific differences between the two types of proposals will be explained to you by Bromwich & Smith Inc.
12. Please note that any proposal will have a negative impact on your credit rating.