Tag Archives: Bankruptcy Trustees


How Much Debt will a Consumer Proposal Eliminate?

Although filing a Consumer Proposal is a debt management option that has been around for some time, it’s only in recent years that more Canadians have become aware of this powerful alternative to bankruptcy.  A Consumer Proposal allows you to make a legal arrangement with your creditors wherein you’ll only have to repay a portion of your debts – in full settlement – with no interest, fees or additional penalties.  In fact, it’s not uncommon for debts to be reduced by 70-80%!  Consumer Proposals can only be filed by a Licensed Insolvency Trustee (“LIT”) and have substantial advantages compared to traditional credit counselling programs or debt consolidation loans.

One of the many benefits of a Consumer Proposal is that it is tailored to meet the specific needs of the individual.  Let’s review some of the factors that come into play when assessing a person’s ability to file a Consumer Proposal, and share some real-life examples of how much debt some individuals we’ve assisted were able to eliminate:

Consumer Proposal key success factor #1: Total amount of debt – The total amount of debt is important as a proposal can only succeed if you are able to repay a ‘meaningful’ portion of the debt outstanding.  If the debts are such that you are able to afford to repay at least 20-40% of the balance, then a consumer proposal can be a great fit.

Interest will automatically be frozen by law on the debt – this is significant as it means the debt will not continue to grow.  We often meet with people making large monthly payments on their debts, but because of accruing interest they’re never able to pay the debt off completely.

Consumer Proposal key success factor #2: Monthly household income – The household budget plays the largest factor in determining what sort of repayment terms will make for a successful Consumer Proposal.  Family-size and personal budgets need to be carefully considered to ensure that your Consumer Proposal gives you breathing room and allows you to have manageable finances, debt-free.

Here are a few examples that show how three Consumer Proposal worked for people who each had a very different set of circumstances.  You can see how the settlement to their creditors varied depending on income, the amount of debt, and their personal situations:

Example #1

  • 35-year old skilled tradesman with health issues
  • Held approximately $55,000 in consumer debts
    • Creditors were calling him daily
    • Minimum payments were taking up half of his $3,200 monthly income

His Consumer Proposal was filed, which stopped all interest, stopped all the calls and reduced the debts from $55,000 to $23,400 in total.   He agreed to make monthly payments of $650 over a 36 month period.

Example #2

  • 43-year old woman who had previous periods of unemployment
  • Was carrying around $9,000 of consumer debts
    • Multiple payday loans

For her Consumer Proposal she made monthly payments of $200 a month for a total of 24 months.  We were able to settle her debts in full at $4,800 total, with no interest or added fees.

Example #3

  • 70-year old widowed woman with increased living costs
  • Had around $17,000 of consumer debts

Her Consumer Proposal called for repayment of $6,300, by way of monthly payments of $150 for 42 months, which would reduce her debts by around 80% in full settlement. 

When trying to determine just how much of your debt could be eliminated using a Consumer Proposal it’s always best to meet with a Licensed Insolvency Trustee face-to-face.  There is no charge for this meeting and it’s also an opportunity to find out about other possible options you may have available to create a debt-free future.

Contact us today for a free, confidential assessment of your situation and options in one of our 15 BC offices.


Ask the Trustee – August Edition

Licensed Insolvency Trustee Blair Mantin answers your questions about how to manage debts, including options such as Credit Counselling, Consumer Proposals and Bankruptcy in BC!

Q: What should I consider before taking on joint debt or co-signing a loan?

A: Think carefully before agreeing to any co-signing or joint debts.

By co-signing, you become equally responsible for repaying the full balance left to the lender if the other person does not pay.  Consider if you would be able to maintain the payments on your own if you had to.

Some credit card terms may state that secondary cardholders can also be responsible for outstanding balances, even if they were not the original applicant for the card.  Always check terms before accepting a secondary or supplementary card.

It’s also important to note that you are not responsible for repaying your spouse’s creditors (even if they file a bankruptcy or consumer proposal) unless you have co-signed on the debts.

To find out more about your debt options, call us at 1-800-661-3030 or contact us here to arrange for a free, confidential consultation.


5 Easy Ways to Avoid Spending Money

Sometimes spending can get out of hand and unchecked spending habits can lead to problems with debt.  If avoiding the urge to spend money is a challenge for you, try these five tips!


Click the infographic to enlarge.

To meet with a representative for a free, confidential consultation in one of our 15 BC offices, please contact us.


Sands & Associates Answers your Top FAQs – Part II

Sands & Associates Answers your Top FAQs – Part II

Most people aren’t aware of how Consumer Proposals or personal bankruptcy work – so it’s no surprise that as Licensed Insolvency Trustees we get asked a lot of questions each and every day.  We’ve asked some of our knowledgeable staff to answer the top 10 questions we hear – if you missed last week’s Top FAQs, click here to catch up!

Can I make a Consumer Proposal on my own?

An individual cannot file a Consumer Proposal on their own.  A Licensed Insolvency Trustee (“LIT”) is the only person qualified to assist a person in filing a Consumer Proposal.

Because a Consumer Proposal is a binding legal agreement under Canadian laws, you are provided with legal protection so that your creditors cannot collect on their debt.

Dana Timko, Estate Manager (Langley office)

How long do a Consumer Proposal and Bankruptcy each take? 

It’s typical that many Consumer Proposals are written for a period of 24 to 36 months, but they could be for as little as one month, or as many as 60 months, (this is the maximum amount of time that the proposal can stretched).  There is no penalty for paying out a Consumer Proposal sooner than the stated terms.  An important component is that we are able to keep payments at a reasonable level, which means individuals are most likely to successfully complete their proposal.  Once the terms of the proposal have been fulfilled (i.e., all payments made), the proposal is complete – even if it is earlier than the originally stated duration!

Generally speaking, a bankruptcy takes either 9 or 21 months, depending on your income level.  If your income is below a low-income cutoff (this number changes according to family size) the bankruptcy is 9 months.  If your income is above the amount then the bankruptcy is 21 months.   If you have been bankrupt before these durations change to 24 and 36 months respectively.  Relief from creditor harassment, and the creditor’s payment obligations take effect immediately however, regardless of the length of the bankruptcy.

Stephanie Munsie, Estate Manager (Vancouver Island offices)

What happens to my Canada Revenue Agency debts?

Filing either a Consumer Proposal or Bankruptcy under the Bankruptcy and Insolvency Act is the only method of eliminating Canada Revenue Agency debts.   Outstanding government debts such as personal income tax, GST, and director’s liability for corporate and/or government debts are dissolved in a Consumer Proposal and/or Bankruptcy.

Student loans are another government debt that can be resolved with a Consumer Proposal or Bankruptcy.  The current legislation states that if the student loan is more than 7 years old from the last day you attended school, the student loans will be extinguished in a Consumer Proposal and/or Bankruptcy.

Julie Medeiros, Estate Manager (Tricities office)

What if I’ve filed for bankruptcy before?

If you have been bankrupt before, it is possible to file for Bankruptcy a second or even a third time. Filing any subsequent bankruptcies will require that you remain in bankruptcy for a longer period of time and will have more lasting impacts on your credit rating.

If you wish to avoid filing multiple bankruptcies, a Consumer Proposal may be an alternative available to you. Depending on your household income and your ability to make regular monthly payments, a Consumer Proposal can be a great alternative to Bankruptcy in order to settle your debts.

Laura Kehtler, Estate Manager (New Westminster office)

What are the effects of a Consumer Proposal on my credit history?

A Consumer Proposal is noted on a credit report for two-to-three years from the date of your final payment (i.e., two years with Equifax, three years with TransUnion).

These dates do not mean that a person cannot obtain credit, only that the information is noted on the report for future creditors to consider. It is up to the bank whether they want to grant credit and at what rate of interest.

The timeframe that the Consumer Proposal is noted on the credit report is actually the best time to rebuild and re-establish credit, so that by the time the negative information disappears, a person could have achieved a good credit standing again.

Darlene Mullen, Estate Manager (Vancouver office)

Click here to read Part I of our “Top FAQs”!

Ready to talk?  Contact us for a free, confidential consultation to discuss your situation and debt solutions.


Sands & Associates Answers your Top FAQs – Part I

Most people aren’t aware of how Consumer Proposals or personal bankruptcy work – so it’s no surprise that as Licensed Insolvency Trustees we get asked a lot of questions each and every day.  We’ve asked some of our knowledgeable staff to answer the top 10 questions we hear – read on!

Can I avoid bankruptcy but still deal with my debts?

Yes!  A Consumer Proposal is another option to deal with your debt.  A Consumer Proposal is simply a deal between you and your creditors to offer less than 100 cents on the dollar, in full settlement of the debt. The creditors vote on the proposal and the proposal is legally binding on all your unsecured creditors, so they can’t pursue you for payment.

Tracey Lowe, Licensed Insolvency Trustee (Burnaby office)

Is a Consumer Proposal the same as debt settlement?

A Consumer Proposal is definitely not the same as a debt settlement agreement. With debt settlement you would need to come up with a lump sum all at once, which can be very difficult; whereas in a Consumer Proposal you can make monthly payments and the payments are pre-determined, making budgeting easier. Also with a debt settlement the creditors do not have to agree to this and they can sue you, obtain a judgement against you and either garnish your wages or put a lien on your assets.

A stay of proceedings goes into effect when you start a Consumer Proposal and creditors cannot sue you anymore. I always say a Consumer Proposal is the best product available because not only is the debt itself reduced, but payments can be made monthly, the interest and penalties are stopped and on top of that the creditors cannot contact you.

Marlene Byrne, Estate Manager (Maple Ridge office)

Can I keep my house and car if I file for personal Bankruptcy?

Provincial legislation states that you are allowed to keep a number of assets, including equity in a vehicle up to $5,000, as well as a portion of the equity in your home.  Any amount over and above that exempt value the trustee has a responsibility to collect or realize for the creditors.  If the equity amount is low a person can generally pay the equity amount throughout the bankruptcy process.

It’s important to note that even if a person has equity in their car or home that is more than the exemption amounts allowed, it doesn’t mean they won’t get to keep the asset.  There are a few ways to deal with the assets in that case.

If you have a loan on your vehicle or a mortgage for your home, we establish through documentation you and your creditors provide if there is any equity (of course the exemptions mentioned above are also factored in).

If the trustee establishes that there is no equity in the vehicle, you can decide whether or not you want to keep making payments on the financing, or to let the car go back to the creditor. If you wish to return the vehicle it will be covered under the bankruptcy or Consumer Proposal.  The same basic options apply with a mortgage.

Sandra Myers, Estate Manager (Chilliwack office)

How does a Bankruptcy or Consumer Proposal impact my spouse? 

If you spouse isn’t attached to any of your loans by co-signing or guaranteeing them, it won’t affect your spouse at all.  Your spouse will be able to maintain his/her credit rating throughout your Bankruptcy or Consumer Proposal.

Cindy Wallas, Estate Manager (White Rock office)

What are your fees as licensed insolvency trustees?

In most cases our fees are legislated by the government of Canada.

All fees taken by licensed insolvency trustees are subject to the approval of creditors, our regulator (The Office of the Superintendent of Bankruptcy) and the court.  This ensures complete transparency and promotes the integrity of the insolvency system.

Individuals that are not regulated by the government or the Office of the Superintendent of Bankruptcy may charge as they wish.

Raj Hara, Licensed Insolvency Trustee (Surrey office)

Check in next week for Part II of our “Top FAQs”!

Ready to talk?  Contact us for a free, confidential consultation to discuss your situation and debt solutions.


Ask the Trustee – July Edition

Licensed insolvency trustee Blair Mantin answers your questions about how to manage debts, including options such as Credit Counselling, Consumer Proposals and Bankruptcy in BC!

Q: What is a Licensed Insolvency Trustee, or Bankruptcy Trustee?

A: Licensed Insolvency Trustees, or Bankruptcy Trustees are those legally empowered to shield you from creditors.  Even debts such as income tax and student loans can be eliminated with the help of a Trustee.  Trustees are also the only people who may file a Consumer Proposal to settle your debts in full, at a reduced amount with no interest.

Trustees are licensed and overseen by the government to administer Consumer Proposals and Bankruptcies.  They must meet specific qualifications and have successfully completed a specialized program.

Trustees are impartial officers of the court, they will review all of your options with you for free, ensuring you have the knowledge needed to resolve your debts.

To find out more about your debt options, call us at 1-800-661-3030 or contact us here to arrange for a free, confidential consultation.