Are you struggling to keep up with your unsecured debts? Before filing for bankruptcy, you might consider a consumer proposal. What are the steps required to file a consumer proposal:
- Make an appointment with a Licensed Insolvency Trustee.
Your initial consultation with Doug Lee & Associates Inc. (Freshstartbc) is always free and with no other obligations. The objective of the initial assessment is to learn about your debt situation so we can provide advice about debt relief options that will work for you. We will assess your financial situation and review all your financial options. If you determine that a consumer proposal is the best choice for you, we will prepare all the necessary paperwork and table your offer to the creditors.
- Formulate the consumer proposal.
If you decide to file a consumer proposal, we will help you decide how much to offer your unsecured creditors. The proposal terms are normally structured over 5 years with one monthly payment. While the amount of debt being repaid is usually substantially less than the actual amount owed, it is normally more than the creditors would get if you had filed for Bankruptcy.
- File your proposal and notify your creditors.
Once your proposal offer has been determined, the next step is to file your consumer proposal documents with the government and send a notice to your creditors. Upon receiving this notice, your creditors cannot commence or continue any actions to collect their debts from you. Your creditors must then file a formal claim to be eligible to vote in the proposal.
- Voting of creditors.
Your creditors have 45 days to vote to accept, amend or reject the proposal. If the majority of your creditor accepts the proposal (51%), it will be legally binding upon all your creditors. Once a proposal is accepted by the creditors, all interest is frozen and all unsecured debt collection efforts, including calls, letters, wage garnishments, and legal actions will stop. In our experience, the vast majority of consumer proposal are accepted as offered.
- Making your monthly proposal payments.
Until your proposal is accepted by your creditors you make no payments. You will not have to pay any additional fees or service charges. Once your proposal is accepted you make your agreed upon proposal payments. It is also possible to pay off your proposal early if your financial situation improves. During the process, you can miss two payments, which would then be added on to the end. If a third payment is missed during this process, the proposal would be annulled and your creditors rights would be revived to purse you for collections.
- Attend two Counselling sessions.
You will be required to attend two credit counselling sessions, which provides you with budgeting and money management advice to help you in the future. We will also provide information on how you can begin to rebuild your credit.
It should be noted that attendance at these sessions is mandatory. If you have not attended both sessions, you will not have completed your proposal, even if you made all your proposal payments.
- Congratulations, you are now debt free.
Once you have fulfilled the terms of your consumer proposal and made all your monthly payments, we will file the necessary paperwork to release you from your debt.
- Continue to rebuild your credit.
You can certainly begin the process of repairing your credit during your proposal. We will provide you with information on how to do that. Once your proposal is done, you can continue this process. Many people find they are in a much healthier financial state upon completion of their proposal, not only debt free but with additional savings as well.
If you have any questions about the consumer proposal process, book a free consultation to speak with a Licensed Insolvency Trustee. We are here to provide you a FreshStart.