The Cost of Filing a Consumer Proposal
Most people are pleasantly surprised when they hear that Consumer Proposal filing is free. Yes, there are costs associated with the program but they are paid out from your monthly payments – there are no upfront costs or filing fees!
Before we go into the actual nitty-gritty of how the payments work we’d like to stress that there are unlicensed, unregulated debt management companies out there that act like intermediaries. These companies may charge an upfront fee to provide consulting services and then hand over your file to a trustee or credit counselling company. adsense ban . While many of these consultants are experienced and know their job well, a lot of them are beginners and it’s really important to do your due diligence and make sure you’re working with someone reputable. So keep that in mind – if you come to a trustee directly there are no upfront fees but if you’re working with a 3rd party they could charge deposits, consultation fees and other extras.
How it works if you work with us:
When you come directly to us we provide a free, no obligation consultation during which we review your financial situation and provide a recommendation based on what debt solution may be best for you.
If you decide to go ahead with a consumer proposal, we do not take any deposits or charge any fees. You simply get your financial documents together and we prepare and file the proposal. Upon filing the documents with the government and your creditors you’ll begin paying your monthly proposal payments and our preparation, ongoing administration and the two credit counselling session fees will be paid from those monthly payments.
However, it is important to note that the trustee’s fees are effectively paid by the creditors. Your proposal payments are deposited into a trust bank account from which the payments to creditors and the fees and costs of the proposal are paid.
In addition, as Trustees and Administrators we can only take fees as set out by government legislation. In other words, our fees are set by tariff and there are no fees or other costs charged in addition to your monthly payment.
How is your proposal payment calculated?
In order for creditors to accept your proposal it must offer them more money than if you were to file bankruptcy. Also, it must be a reasonable payment in relation to your income. The higher your income, the higher the expectation of your monthly payment.
That being said, typical proposals offer ~65% debt reduction and the remaining balance is split into 36, 48 or 60 monthly payments.
For example:
Your unsecured debt: $20,000
Debt to pay off after 65% reduction – $7,000
Monthly: $7,000 / 36 months = $194/mo. for 3 years
The above is a general example. Your income, debts, family situation – are all taken into account when working out a monthly payment amount. But as you can see, a consumer proposal is often one of the best ways to start fresh and solve your debt problems once and for all!
Free Consultation
Get in touch today and take advantage of the free consultation. It’s a completely confidential, no-obligation consult to help you understand your options and what may be the best course of action in your situation.
