Consumer Proposal in Red Deer
Here at Blanchard & Company, we understand that life throws many unexpected curveballs that can result in financial hardships.
Consumer Proposals and How They Benefit You
Filing a consumer proposal in Red Deer is a valid debt repayment option if you want to consolidate some or all of your debt. It is a formal settlement of what you owe to your creditors, handled by the Licensed Insolvency Trustee at Blanchard & Company Ltd. on your behalf as provided for by the Bankruptcy and Insolvency Act. It will eliminate a percentage of the original amount owed and stop interest so you can actually afford to pay your outstanding debt based on your income and the amount you owe.
For your consumer proposal to be legally binding, the creditors who hold the majority of your debt must agree to the terms that we assist you in arranging. If they agree, and they typically do, you will then be required to strictly follow the terms outlined in your consumer proposal over a term of up to 5 years.
Consumer Proposal pros and cons
• It considerably reduces the amount you have to repay your creditors
• Your assets do not rest with the Trustee like they do in a bankruptcy
• It is a helpful debt repair solution if you cannot afford to repay all of what you owe, you may not need to be employed to make a consumer proposal
• It pauses active collection on student loan repayments and arrears in support payments
• You can qualify for a consumer proposal even if you don’t qualify for a debt consolidation loan
• It can help you avoid bankruptcy
• It can be more expensive than bankruptcy, although depending on the situation, it could potentially be cheaper. It must be approved by your creditors, who have the right to reject your proposal; however, they are typically willing to negotiate if they initially reject
• Student loans will not be forgiven if it has been less than 7 years from your end study date.
Consumer Proposals and Your Credit
A consumer proposal will register an R7 on your credit report for 3 years after it is fully performed. With that said, there are 2 mandatory financial credit counselling sessions provided as part of the proposal which will educate you on how to repair your credit quickly and efficiently.
Some secured debts may not be included in your consumer proposal. A secured creditor is a lender who has been given tangible collateral that can be reclaimed if you default on your payments. An example of this would be your car loan. The creditor of your car loan is secured because they can repossess your vehicle if you fail to make regular payments. By continuing to make your regular monthly payments to your secured creditors, you will keep the secured assets and at the same time lessen the impact a consumer proposal has on your credit. Keeping up a good payment history on secured debts while paying off your proposal can help rebuild your credit score more quickly.
The committed team at Blanchard & Company have made it their mission to provide all their clients with high-quality and reliable insolvency services in order to relieve them of their financial burdens and set them up for a financially free future.
We care about your privacy. You can feel confident when visiting our safe and judgment-free office, knowing that we’ll provide you with the most suitable insolvency options to fit your needs. Our licensed team of professionals will also provide a thorough education on your current financial conditions and insolvency options, so you can feel confident that you will make well-informed decisions in the future.
FAQ – Consumer Proposal
Are consumer proposals usually accepted?
Yes! Consumer Proposals vary for every person, but most are accepted. Most consumer proposals offer a good deal to creditors and lenders, so they are usually accepted. Some proposals don’t even need a meeting with creditors.
How much will I pay back in a consumer proposal?
In a best-case scenario, a consumer proposal can reduce your principal to 20 or 25% of what you originally owed.
How will a consumer proposal help me?
- It can help you avoid bankruptcy.
- The formal document sets clear rules and expectations.
- A stay of proceedings will be issued for non-secured creditors.
- Your loans will stop accruing interest.
How will a consumer proposal hurt me?
- You will be required to fully disclose your financial situation.
- There are strict rules and regulations that cannot be changed.
- Stay of proceedings does not apply to secured creditors.
- Interest continues to accrue on secured debts.
- You cannot pick and choose which creditors are included or not included in your proposal.
What can be included in my consumer proposal?
Most unsecured debts will be included in your consumer proposal, including:
- Credit card debt
- Lines of credit
- Personal loans
- Payday loans
- Student loans older than 7 years
- Income tax debts
Will I lose my car or my house in a consumer proposal?
No, you will not lose your car or house in a consumer proposal. Your assets will be protected from unsecured creditors, but secured creditors are not included in your proposal. This means that as long as you continue to make payments on your car loan or mortgage, your secured assets will not be repossessed.
Can I keep my credit cards during a consumer proposal?
A consumer proposal will negatively impact your credit since a note will show up on your credit report for three to six years. This will let lenders know that you have filed a proposal which can make it hard to obtain future lending but it is possible to rebuild your credit after a consumer proposal.
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