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Consumer Proposal FAQ and You – Let’s Deal with the Facts!

Posted on 24 May 2017

Consumer proposal FAQ

  1. Is a consumer proposal the same as bankruptcy? No. While they are similar, a consumer proposal is not the same as bankruptcy. There are distinct differences. You can find out more about those differences here.
  2. Is a consumer proposal a debt consolidation loan? No. A consumer proposal is not a loan. It involves a proposal made to your creditors, proposing an amount (usually less than what you owe) that you will repay over a maximum of five years. Once accepted, you begin paying in accordance with the repayment terms of the proposal. A debt consolidation loan consolidates your debts but does not reduce the total debt owing.
  3. Is a consumer proposal a debt settlement? It is a negotiated legally binding agreement with your creditors that leaves you repaying an often-reduced amount of debt with a single monthly payment. Only a Licensed Insolvency Trustee can file a consumer proposal on your behalf.
  4. Will I have a single monthly payment? Once accepted, you will make a single monthly payment.
  5. Will I keep having to pay interest? All interest stops accumulating once the proposal is accepted.
  6. Who do I pay? In a consumer proposal, you make the monthly payment to your trustee. The trustee then pays your creditors.
  7. Can I keep my house and my vehicle? This largely depends on equity and value, so a free, no obligation consultation with a trustee is best.
  8. Will a consumer proposal ruin my credit? While it is reported to your credit report, it is removed from your report 3 years from when it is paid in full. However, you can begin to rebuild your credit rating with in a consumer proposal. Your trustee can give you some credit rebuilding best practices.
  9. Who files and administers the consumer proposal? Only a Licensed Insolvency Trustee can file and administer a consumer proposal.
  10. Does it reduce my debt? Yes, in most cases a consumer proposal can significantly reduce your overall debt.

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Helpful starting information:

What to Bring to an Appointment

To get the debt help that you need, please bring a list of who you owe and how much to each, a list of everything you own and your monthly household budget. Don’t have everything right away? Don’t worry – We will guide you through each step.

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Your Information

We’ll walk you through our application process. But, if you want to prepare for your debt free assessment consultation in advance, download our information form and fill in what you can.

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Calculate Your Debt Repayment Options

How can you compare your debt repayment options if you don’t know how much they will cost you? Your solution will become much clearer when you are able to compare costs.

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Ready to Be Debt-Free?

If you’re ready to be debt free, it’s time to meet with one of our knowledgeable Licensed Insolvency Trustees at your convenience and get started

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