|
If you live in Regina, Saskatchewan and your monthly expenses are getting out of hand, you may need to think about filing a consumer proposal.
Consumer proposals are a popular alternative to bankruptcy, as they allow you to pay back your debts over an extended period of time. You also will not lose any of your assets as you would in a bankruptcy.
Proposals are ideal for people who have debts in excess of $5,000, who have a stable income, and who are capable of paying a portion of the debt. Proposals are legally binding unlike debt management plans, and are administered by a licensed trustee.
The advantages of consumer proposals include a maximum period of 5 years, frozen interest from the date of filing, it is typically accepted by creditors, you can negotiate to only pay a portion back, wage garnishments stop, and creditors are “stayed” from pursuing legal action.
At the start of the process, a trustee will summarize your financial situation to determine how much you can afford to pay your creditors each month.
The next part is up to your creditors. They will have 45 days to vote for or against your proposal. If a majority agrees that the proposal is acceptable, it is deemed acceptable by all. 15 days later if there are no objections, the proposal will be permitted by the court. From that time on, you and your creditors are bound into the terms of the proposal.
If 25 percent or more do not agree with your proposal, you and your creditors must return to the drawing table. Your trustee will call a meeting of creditors to help you and your creditors agree on a feasible proposal. The proposal must include all creditors.
During the course of the proposal you may miss up to two payments without being penalized. Your trustee will simply add two payments onto the end of the proposal. If more than two payments are missed, however, your proposal will be annulled by the court, interest charges will be added to all debts dating back to the beginning of the proposal, and creditors can file to have your wages garnished.
Your credit rating will be adjusted to reflect your financial situation, and you will also have a note attached to your report for up to seven years starting from the day you filed.
Trustee fees are set by the Superintendent of Bankruptcy but most of the time trustees will be paid for out of the proceeds of your proposal.
We strongly recommend consulting a licensed trustee before proceeding with the process. A trustee will help you determine if a consumer proposal is the best possible alternative for your individual situation. To find a licensed bankruptcy trustee, click here.
|
.gif){kind=spacer}
