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Navigating Consumer Proposals: A Comprehensive Guide

consumer proposal belleville

When it comes to debt resolution, some people tend to think that filing for bankruptcy is the only viable alternative for dealing with what they owe. However, consumer proposals can often be a more advantageous solution. This blog aims to share a comprehensive guide and answer common questions related to consumer proposals, providing you with valuable and informative insights.


What Is a Consumer Proposal?


A consumer proposal is a formal offer you file for your creditors with the intention of paying what you owe. It is usually an advantageous alternative as it often reduces the amount of debt you have while allowing you to keep ownership over your assets. Additionally, consumer proposals give you the possibility of paying the reduced debt in instalments over five years, which provides you with a more flexible resolution.


How Do I File a Consumer Proposal?


In order to file a consumer proposal, you will need a Licensed Insolvency Trustee, who will evaluate your financial situation and assist you in coming up with a reasonable proposal to offer your creditors. Once the offer is determined, the Licensed Insolvency Trustee will file the proposal with the Office of the Superintendent of Bankruptcy. Your creditors will have 45 days to either accept or reject the offer.


Does a Consumer Proposal Have an Impact on My Credit Score?


Consumer proposals affect your credit score, though less drastically than filing for bankruptcy. They will be visible on your record for three years after the completion of your payment or up to six years from the date you filed your proposal.


CRA Refunds with a Consumer Proposal


Many people think that they won’t be able to get their tax refund if they have filled for a consumer proposal, however, this is typically not the case. Since you keep ownership over your assets, you will continue to receive the tax refunds you are entitled to, meaning your creditors won’t be able to use these sums as payments for your debt.


How Many Times Can You File a Consumer Proposal?


Theoretically, there is no limit of times you can file a consumer proposal. If you have found yourself in debt with a new creditor after paying your previous debt, you will be able to file a new proposal as long as you meet the eligibility requirements and follow the same standard procedures. However, if you are considering making a new offer for a debt you were not able to pay, reviving and renegotiating an annulled proposal may be a more advantageous strategy than filing a new proposal altogether.


Legal Assistance for Consumer Proposals


Having difficulties understanding the complexities of consumer proposals? Looking for consumer proposal Belleville or debt relief solutions in Cobourg, Kingston, and Trenton? F. J. Zielski & Associates Inc is here to help. Our experienced team will be able to guide you through the entire process, providing you with all the assistance you need to file your proposal. Don’t hesitate to give us a call and let us be your partner in the journey toward a financially sable life. Reach out to us!


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