Sands & Associates Vice-President and licensed Trustee Blair Mantin will be appearing on today’s CTV Morning Live segment “Ask an Expert”. Today’s segment focuses on the number one alternative to bankruptcy in Canada, a Consumer Proposal.
A Consumer Proposal allows a person to make a legal arrangement, or debt settlement, with their creditors which allows them to repay only the portion of their debts they are able to afford, with no future interest charged.
Watch the clip here, and read more below:
The main goal of a Consumer Proposal is to settle the amounts owed to creditors without over-burdening the individual with unmanageable interest charges and payment terms.
- Consumer Proposals can and do vary greatly depending on a person’s unique set of needs and circumstances. Income levels and family size are taken into account, and a Trustee is not permitted to file a proposal that would result in undue hardship to the individual.
- Repayment terms of 20-30% of the debt in full settlement over a period of 24 to 48 months are common. Proposal terms can be paid early at any time, with no penalty.
- Interest is automatically frozen by law on all debts and contact from creditors must cease upon filing.
- An R7 credit rating is noted for 2 years following successful completion of the proposal.
Why would creditors agree to a Consumer Proposal?
Because a Consumer Proposal provides for a better result to the creditors than in a bankruptcy, Consumer Proposals are almost always accepted by the creditors.
- All creditors are bound by the terms of the Consumer Proposal if 50% of voting creditors by dollar value accept it.
- Consumer Proposals are the only method in Canada for reducing government debts such as taxes or student loans.
Only a Licensed Insolvency Trustee can help you file a Consumer Proposal.
- Trustees are federally licensed and must comply with a code of ethics and rules of professional conduct.
- Administration costs are included in the payment amount offered to creditors under the Consumer Proposal, meaning no additional out-of-pocket costs are incurred by the individual.
- Only a licensed Trustee and Proposal Administrator can cease a wage garnishment, asset seizure and other collection action.
The best way to find out if a Consumer Proposal may be a debt solution for you is to meet with a licensed Trustee at Sands & Associates. Confidential consultations to discuss your situation are always free and no referral is needed.
With over 29 years of experience, Sands & Associates is BC’s largest firm of Licensed Insolvency Trustees focused exclusively on assisting individuals and small businesses achieve their “debt free” goals.