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If you live in Victoria, British Columbia and are looking for an alternative option to bankruptcy, you should look into a consumer proposal. Consumer proposals are one of the most popular bankruptcy alternatives, for those who want to avoid bankruptcy. Consult the list below for the information you’ll want to know before proceeding.
- To qualify for a consumer proposal, you should have a stable source of income, and should have the ability to pay back your debts if given an extended period of time. Your debts should also be somewhere between $5,000 and $75,000.
- A consumer proposal differs from a debt management plan in that it is legally binding and administered by the courts and a licensed bankruptcy trustee.
- Some advantages of consumer proposals include a maximum period of 5 years, creditors usually accept it, interest is frozen, you can work out a deal with your creditors to only pay a fraction of the debt, wage garnishments end, and your creditors may not pursue legal action.
- Your bankruptcy trustee will start by assessing your finances to determine the amount that you can likely pay back each month. If the numbers seem rational to both you and your creditors, the trustee will file the proposal.
- Your creditors have 45 days from that date, to approve or oppose your proposal. If 50% or more approve your proposal, it is considered suitable by all creditors. Most of the time your creditors will approve your proposal, since they know they would receive even less if you filed for bankruptcy.
- If 25% or more of your creditors oppose your proposal, your trustee will call a mandatory meeting of creditors to re-negotiate the proposal.
- Fifteen days later, if none of your creditors have opposed your proposal, it will be approved by the court. You and your creditors are then locked into the terms of the proposal.
- You can miss as many as two payments during the proposal. Your trustee will just add two payments onto the end of it. But, if you miss any more than two, the proposal will be annulled by the court. Your creditors can then apply to have your wages garnished, and interest charges are applied to all debts.
- After you file the proposal, your credit rating will be instantly altered to reflect your financial situation, and will probably stay that way until the proposal is complete. A note will also appear on your credit report for seven years.
- Trustee fees are set up by the Superintendent of Bankruptcy. Usually your trustee is paid out of the proceeds of your proposal.
- If you believe a consumer proposal would be your best option, please contact us today. Our bankruptcy trustees in Victoria will give you an initial consultation completely free of charge. We will discuss your situation, and help you choose the best possible solution.
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