Consumer Proposal Benefits
Repay a portion of what you owe without the impact of bankruptcy
Your Strategic Partner in Consumer Proposals
Consumer Proposals: Navigate Your Way to Financial Recovery
At Debt Free 911, we specialize in crafting personalized consumer proposals that serve as a lifeline for individuals drowning in debt. With 51 offices across Canada and bolstered by over 3,000 independent, verified reviews on TrustPilot, we’ve helped over 50,000 families manage over $300 million in unmanageable consumer debt annually. Our consumer proposal services are designed to provide substantial relief, allowing you to renegotiate your debt under terms that are feasible and sustainable.
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Comprehensive Understanding of Consumer Proposals
Comprehensive Understanding of Consumer Proposals
What is a Consumer Proposal?
A consumer proposal is a legally binding process supervised by a Licensed Insolvency Trustee (LIT) that allows you to pay back a portion of what you owe to your creditors. It’s an effective alternative to bankruptcy, designed to protect you from debt collectors and drastically reduce your overall debt load without losing your assets.
Tailored Debt Solutions
Personalized Proposal Creation
Each financial situation is unique, which is why our proposals are custom-made. We assess your financial health comprehensively—considering your income, expenses, and total debt—to propose a repayment plan that fits your budget and lifestyle. This personalized approach not only helps in gaining creditor approval but also ensures that the repayment terms are realistic and manageable for you.
The Consumer Proposal Process: A Step-by-Step Guide
Understanding the process is crucial for anyone considering this debt relief option. Here’s how we guide you through the consumer proposal journey:
- Initial Consultation: We begin with a detailed assessment of your financial situation to determine if a consumer proposal is the best route for you.
- Proposal Development: Based on your financial assessment, we craft a proposal that outlines how much you can afford to repay.
- Negotiation: We then negotiate with your creditors on your behalf to accept the proposal, which often includes significant reductions in the total debt owed.
- Implementation: Once accepted, the proposal becomes legally binding. You make one lower monthly payment to the trustee, who distributes it among your creditors.
- Completion: After fulfilling the terms of your consumer proposal, you are released from the debts included in the agreement, marking the beginning of your new debt-free life.
Empowering You with Knowledge and Options
Credit Rebuilding and Sustained Financial Health
Our support extends beyond debt reduction. At Debt Free 911, we equip you with the necessary tools to rebuild your credit and maintain financial stability. Our comprehensive aftercare program ensures you have the knowledge to manage your finances effectively, preventing future financial pitfalls.
• Payback a percentage of what you owe without interest or penalty
•The repayment period is up to 60 months
•The repayment amount is based on your budget and ability to pay
Consumer Proposal Benefits
- Most wage garnishments cease immediately
- Interest stops accumulating from the day the consumer proposal is filed
- Collection agencies and creditors can no longer contact you
- Consumer proposals do less damage on your credit bureau rating than a bankruptcy by reporting as a "7" instead of a 9. So it is easier and quicker to start rebuilding your credit
Through this process, a debtor is required to give "full disclosure" of all their assets, liabilities, income and expenses, as well as business interest as part of the process.
Understanding Consumer Proposals
What happens when you do a consumer proposal?
When you file a consumer proposal, you enter a legal process that involves negotiating to pay back a portion of your debts over a period of up to five years. Once the proposal is accepted by your creditors, all interest on your debts stops, and creditors are prevented from taking any legal action against you. You make monthly payments to a Licensed Insolvency Trustee, who then disburses these payments among your creditors.
How much can I save with a consumer proposal?
The amount you can save with a consumer proposal varies depending on your specific debts, your creditors, and your financial situation. Typically, you can expect to pay back significantly less than the total amount owed, often up to only 30% to 50% of the original debts. This reduction can result in substantial savings, especially on high-interest unsecured debts.
What is the downside of a consumer proposal?
While a consumer proposal can offer a fresh financial start, it does impact your credit rating. A consumer proposal will appear on your credit report for three years after completion, which can make obtaining new credit more challenging during this period. However, this impact is less severe than that of bankruptcy.
What is the consumer proposal process?
The consumer proposal process includes several key steps:
- Assessment by a Licensed Insolvency Trustee: They evaluate your debts, income, and assets to determine if a consumer proposal is feasible.
- Proposal to Creditors: A proposal is formulated stating the terms of how much you can afford to pay.
- Creditors’ Meeting & Vote: Creditors vote on the proposal, where a simple majority in dollar value needs to approve it.
- Implementation: Upon acceptance, the terms are legally binding, and you start making payments through the trustee.
- Completion: Once all terms are met, you are formally released from the debts included in the proposal.
By choosing Debt Free 911 for your consumer proposal needs, you partner with a leader in debt reduction dedicated to crafting solutions that offer not just immediate relief but long-term financial stability. Start your journey towards financial freedom today with us—your trusted ally in navigating the complexities of debt management.
Clear your doubts
Frequently Asked Questions About Consumer Proposals
- What is a Consumer Proposal?
Answer: A Consumer Proposal is a formal, legally binding process that is administered by a Licensed Insolvency Trustee (LIT). It allows individuals to come to an agreement with their creditors to pay back a portion of their debts over a period of time, which can significantly reduce the total amount owed and stop interest from accumulating.
- What are the key benefits of filing a Consumer Proposal?
Answer:
- Debt Reduction: Typically, you pay back only a portion of what you owe.
- Interest Freeze: Interest on your debts stops accumulating once the proposal is accepted.
- Creditor Protection: Creditors are legally prevented from collection actions and contacting you directly.
- No Asset Loss: Unlike bankruptcy, a Consumer Proposal usually does not involve surrendering your assets.
- What happens if my financial situation changes during a Consumer Proposal?
Answer: If your financial situation changes significantly during a Consumer Proposal, you may be able to amend the terms of your proposal with the help of your Licensed Insolvency Trustee. It’s important to communicate any changes in your situation as soon as possible to adjust your payment plan accordingly.
- Can I obtain new credit while in a Consumer Proposal?
Answer: Yes, you can obtain new credit while in a Consumer Proposal, but it may be at higher interest rates. It is advisable to focus on completing your proposal and rebuilding your credit before taking on significant new credit obligations.
- Who is eligible for a Consumer Proposal?
Answer: Individuals who owe less than $250,000 (excluding the mortgage on their primary residence) and are unable to pay their debts as they become due are eligible to file a Consumer Proposal. This solution is suitable for those looking to avoid bankruptcy and who need a structured plan to manage their debt load more effectively.
- How does the Consumer Proposal process work?
Answer:
- Assessment: We start by evaluating your financial situation to determine if a Consumer Proposal is the best option for you.
- Proposal Development: We help you develop an offer to your creditors, which outlines the terms of how much you will repay and over what period.
- Filing and Negotiation: The proposal is then filed with a Licensed Insolvency Trustee, who presents it to your creditors for approval.
- Implementation: Once accepted, you make payments according to the terms, and upon completion, you are legally released from the debts included in the proposal.
- How long does a Consumer Proposal stay on my credit report?
Answer: A Consumer Proposal will remain on your credit report for three years after you complete all the payments under the proposal. During this time, it may be more challenging to obtain new credit, but the impact will decrease as you continue to rebuild your credit responsibly.
- What happens if my Consumer Proposal is rejected by creditors?
Answer: If your Consumer Proposal is rejected, you can modify and resubmit it, consider other debt relief options, or, as a last resort, consider bankruptcy. Your Licensed Insolvency Trustee will guide you through your options if this occurs.
- How do I get started with a Consumer Proposal
Answer: To get started, you can contact one of our offices across Canada for a free consultation. During this meeting, we will assess your financial situation in detail and discuss whether a Consumer Proposal is the right solution for you.
