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If you’re struggling financially and can’t seem to get ahead with repaying your debts a Consumer Proposal may be a good option to get a fresh start. A Consumer Proposal is a legal agreement between you and your creditors (including income tax owing to CRA) that stops interest from accruing on the amounts owed, and may reduce your total debt amount to be paid back.

In this article we’ll describe the 5 steps you’ll go through when filing a Consumer Proposal:

Step 1 – Determine if the consumer proposal is a right choice for you

The first step is to determine if the proposal appeals to you in general. Some people choose to ignore their debt woes altogether, others file bankruptcy, and some make payments whenever possible and eventually pay it all off. How you choose to handle your debts is completely up to you and if you feel that a debt reduction and a fixed monthly payment that a proposal offers is your best chance to get your financial house in order you can move ahead to the next step with confidence. To read more on how a consumer proposal works and how it stacks up against other debt management options read some of our previous articles:

Step 2 – Get a Free Consultation

The second step is to contact us for your free, no-obligation consultation. One of our trustees or proposal administrators will review your debts and financial situation and provide recommendations. We’ll let you know if a proposal is a good option for your situation, how much of a debt reduction you can expect and how soon you can file.

Step 3 – Gather Documents & Prepare the Proposal

If after speaking with us you’re satisfied with what the proposal can do for you and want to start, you’ll begin gathering debt amounts, income statements, and any other information that’s required for filing. We’ll let you know exactly what you need to gather for the free consultation. Once we receive all the information we’ll prepare the proposal and upon signing, file it with the creditors.

Step 4 – Wait for Creditors to Vote on your proposal

Your creditors have 45 days to accept or reject the proposal. In most cases the proposals are accepted without any problems. However, if you proposal is rejected we can adjust the payout terms and ask creditors to reconsider.

Step 5 – Start making payments

After the creditors accept the proposal your regular payments will begin. This usually happens 60 days from the filing date. For most people, making the monthly payment is easy as the money is taken from your account every month as a pre-authorized withdrawal.

Step 6 – Fulfilling your obligations

The last step is to fulfill your obligations under the proposal. These include, making your monthly payments until the proposal is paid off and attending 2 credit counselling sessions. Once your proposal is paid off, you can begin rebuilding your credit and if you manage your finances properly you’ll be back in a good financial shape in no time at all.

FREE CONSULTATION:

If you have questions or would like to discuss a consumer proposal in more detail don’t hesitate to give as a call or submit a form by clicking the link below. It’s a confidential, no-obligation consultation – you have nothing to lose and everything to gain!