Alternatives to Bankruptcy: Consumer Proposal – #1 Bankruptcy Alternative in Vancouver

I'm having trouble paying my bills each month, but I don't want to file for bankruptcy. What alternatives to bankruptcy I have?

The economy is vibrant in Vancouver right now, with more people working than in the past. This being the case, people have the ability to pay back their debts, but need a certain amount of time to do so. If this is the case with you too, then you might want to consider filing a consumer proposal – one of the most popular bankruptcy alternatives.

What is a consumer proposal?

A consumer proposal is basically a plan of repayment with your creditors. With the help of a bankruptcy trustee, you and your creditors will come to an agreement over the amount you will pay back each month.

Consumer proposal is ideal for people with debt in excess of $5,000 (to a maximum of $75,000) and

Why is a consumer proposal a good alternative to bankruptcy?

There are a number of advantages to consumer proposals, including following:

– a maximum period of 5 years
– if accepted by 50% or more of your creditors it is deemed acceptable by all creditors
– interest is frozen from the date of filing
– you can negotiate to pay back only a portion of the debt
– wage garnishments stop
– your creditors are “stayed” from pursuing any legal action

Filing a consumer proposal: what do I do first?

To start, a bankruptcy trustee will evaluate your financial situation and determine how much you can afford to pay back each month. If the amount seems acceptable to both you and your creditors, the trustee will prepare the proposal.

What if my creditors don't like my proposal?

Your creditors will have 45 days to vote for or against your proposal. If a majority vote for your proposal, it is deemed acceptable by all creditors. If there are no objections, 15 days later your proposal will be approved by the court. Both you and your creditors are then bound to the terms of the consumer proposal. In addition, all creditors must be treated the same, and must be included in the proposal.

What if my creditors do not think my proposal is acceptable?

If 25% or more of your creditors say your proposal is unacceptable, your trustee will call a meeting of creditors. It is mandatory that you attend this meeting. Your trustee will help you and your creditors come to an agreement that is acceptable for everyone.

What debts are included in the proposal?

Consumer proposals are for unsecured debt which is money owed without collateral. Examples include credit cards, lines of credit, personal loans, and income taxes. Secured debt, on the other hand, includes things like mortgages, car loans and leases, and financing contracts. These things are normally excluded form the proposal.

What if I miss a payment?

You are allowed to miss two payments during the proposal, in which case your trustee will simply add two payments to the end. However, if you miss more than two, the proposal falls apart, and your creditors can appeal to the court to have your wages garnished. Interest charges are also added to all debts dating back to the day you filed for the proposal.

How will my credit rating be affected by filing for a consumer proposal?

Immediately after filing, your credit rating will be changed to reflect your current situation. It will likely stay that way for the duration of the proposal. A note will also be added to your credit report for up to seven years beginning from the date you filed.

How much does a consumer proposal cost?

Set by the Superintendent of Bankruptcy, the trustee fees will be paid, in most cases, from the proceeds of your proposal.

How do I know what is the best alternative to bankruptcy in my case?

Research on each of available bankruptcy alternatives is substantial when deciding which option you should go with, and we strongly recommend it.

To help out, our bankruptcy trustees in Vancouver provide a free consultation to the area residents.

Our Vancouver trustees are experienced professionals, licensed by the government of Canada, that will explain you bankruptcy alternatives available to you, analyze and discuss your financial situation, and help you determine which option best fits your specific case. By contacting our Vancouver office today you will receive an immediate response, and we can usually book you for a consultation for the very next day.

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