Consumer proposals allow people to pay back their debts over an extended period of time. They are ideal for those who have debts over $5,000, who have a stable income, and who are capable of paying at least a portion of their debt.

Unlike debt management plans, proposals are legally binding, and are administered by a licensed bankruptcy 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
* creditors are “stayed” from pursuing legal action

A trustee will begin by summarizing your financial situation to establish how much you can afford to pay your creditors each month.

Your creditors now will then have 45 days to vote for or against your proposal. If 50% or more agree that the proposal is adequate, it is deemed acceptable by all creditors. 15 days later, if none of your creditors have any objections, the court will file the proposal. From that point on, you and your creditors are tied to the terms of the proposal. The proposal must include all creditors.

However, if 25 percent or more of your creditors do not agree with your proposal, you and your creditors must return to the drawing board. Your trustee will call a meeting of creditors to help you and your creditors agree on an acceptable proposal.

Throughout the course of the proposal you are permitted to miss as many as two payments without being penalized. Your trustee will just add two payments onto the end of the proposal. However, if more than two payments are missed, your proposal will be annulled by the court, interest charges will be added to all debts dating back to the date you filed, and creditors can apply to have your wages garnished.

Your credit rating will be altered to reflect your financial situation during the proposal, and you will also have a note attached to your report for up to seven years.

Trustee fees are determined by the Superintendent of Bankruptcy but usually trustees will be paid from the proceeds of your proposal.

It is highly recommend that you consult a licensed trustee in Coquitlam before proceeding with the consumer proposal process. A trustee can help you determine if a consumer proposal is the best possible alternative and can guide you through the entire process. To find a licensed bankruptcy trustee in Coquitlam, click here.

Presented below is a chart showing the number of consumer bankruptcies and proposals filed in Coquitlam, British Columbia in 2003 and 2004. as compiled by the Office of the Superintendent of Bankruptcy; full details availabe on their web site.

As the above chart indicates, the bankruptcy rate in Canada in 2004 was relatively unchanged.

Chart assembled from sources believed to be accurate; please review the source noted above for complete results. For further information, please contact us.

Bankruptcy is perfect for people in your situation. There are several bankruptcy alternatives that should be researched before you proceed with bankruptcy, but if you have exhausted all of those options, bankruptcy may be just what you need to get a financial fresh start.

How does bankruptcy work?

In Coquitlam, British Columbia you will need to give most of your assets over to a licensed bankruptcy trustee in exchange for the elimination of your debts. You can get a list of things you’re allowed to keep from your trustee.

In a bankruptcy you will be able to eliminate most, if not all of your debts, but your ability to obtain credit in the future will be negatively effected.

Can I file bankruptcy for free?

The fees for your trustee are set up by the government. However, the actual costs of bankruptcy will be determined by your monthly income, your assets, and the size of your family.

Can I file for bankruptcy without a trustee?

In Canada it is not possible to file bankruptcy without a trustee. The bankruptcy process can be very confusing, and a bankruptcy trustee can ensure that you fulfill each step correctly. They can also advise you on the various options available to you.

To find a bankruptcy trustee in Coquitlam, click here.

i earn approx 2,500 every two weeks.
What are my options?

Answer: You have a number of options. Since you are earning about $5,000 per month, it may be possible to repay your debts on your own. Start by making a household budget and cutting expenses to free up cash. If you are not too far behind on your payments, a debt consolidation loan may also reduce your interest payments and allow you to pay off your debts, if you qualify.

If that’s not possible, a consumer proposal should be considered. You make one monthly payment to repay your debts. If that’s not affordable, your final option is personal bankruptcy.

In your case the biggest disadvantage to personal bankruptcy may be the cost; the more you earn, the more you pay, so unless you have a large family the cost of bankruptcy may be prohibitively expensive. You should contact a bankruptcy trustee to arrange a no charge initial consultation for more information.

situation: income is $2,471/mo
and..I am 67 years old, healthy.
what are my options?

Answer: You have a number of options. First, you could attempt to repay the debts on your own, or perhaps get a debt consolidation loan to lower the interest rate you are paying. If you can’t afford the interest payments, a debt management plan through a not for profit credit counsellor is also an option. Under those options you repay your debts in full, at a reduced rate of interest.

If you can’t afford to repay your debts in full, a consumer proposal may be an option, depending on what you can afford to pay each month. Your total debts are $30,000, so it’s likely that the creditors would accept a consumer proposal for $300 per month for 50 months, or about half of the total that you owe. The exact number you would offer would depend on the size of your family, and whether or not you own any assets, such as a house.

If you can’t afford a proposal, a bankruptcy is also an option. Before deciding, you should consult a bankruptcy trustee for more information, and to set up a free initial consultation.

We have no real assets, no expensive furniture, and no newer appliances or electronics. We can barely make payments and are not even keeping up with the interest on the loans. I am on EI due to medical reasons.

Answer: A student loan is discharged in bankruptcy if more than seven years have elapsed between the time you ceased to be a student and you go bankrupt. If your student loans are less than seven years old, they are not automatically discharged in a bankruptcy.

Answer: The amount you pay during the bankruptcy period depends on your family income, including your common-law spouse’s income, whether they are bankrupt or not. However, their income is only a small factor; the largest cost is based on your income. The calculation of surplus income is somewhat complicated, so we suggest you contact a trustee for a free initial consultation, and they will do the calculation for you, so you can decide if bankruptcy makes sense for you.

What Can You Do?
Once you get behind on your taxes, it can be very difficult to catch up. You can try to negotiate a payment arrangement with Revenue Canada (now called the Canada Revenue Agency (CRA)). If that isn’t possible, you can file a formal proposal to CRA and all of your creditors. The final solution may be a bankruptcy to give you a fresh start. To investigate your options, click here for more information.