Filing a Consumer Proposal in B.C.
When facing financial difficulties and considering the available options, one of the most popular choices is filing a consumer proposal.
A consumer proposal is a legal agreement between yourself and your creditors to settle your debts. Often at a significantly reduced dollar amount and without any further interest charged.
A consumer proposal provides the opportunity to keep your assets in your possession and control. In conjunction with a Licenced Insolvency Trustee, a settlement offer will be determined based on your income, assets, and amount of debt.
In order to file a consumer proposal in B.C., your debts cannot exceed $250,000 (including secured debts but excluding a mortgage on your principal residence). You must be able to afford to make payments towards your debt. It also needs to be affordable for you and reasonable for your creditors. A consumer proposal must be completed within a 60-month term.
For a consumer proposal to be accepted, a majority of your creditors, in dollar value, must vote in favour to accept your settlement offer. Should some of the creditors vote against the proposal, the Licensed Insolvency Trustee will attempt to negotiate acceptable terms between yourself and your creditors. You always have the choice if the payment terms are greater than you can afford to withdraw your consumer proposal.
The cost of your consumer proposal forms part of the consumer proposal’s payment and is never in addition to the amount you agreed to pay under the consumer proposal. The fees and disbursements of the Licensed Insolvency Trustee are in a tariff legislated by the Bankruptcy and Insolvency Act and come out of the total negotiated payments.
The only other obligation you have under the consumer proposal is that you are required to attend two credit counselling sessions.
If you have a positive change in income during your consumer proposal, your proposal offer won’t change, but you will be able to accelerate your payments if you wish.
Once the payments and counselling sessions are complete, a Certificate of Full Performance will be issued. This is a Deemed Court Order that discharges one from the debt covered under the consumer proposal. The credit bureau will obtain a record of your completion of the consumer proposal directly from the Office of the Superintendent of Bankruptcy and will register it on your credit bureau record. The consumer proposal is recorded on your credit report for six years from the date of filing or three years from completion, whichever is sooner. At that time the credit bureau must purge their records.
If a consumer proposal can help you resolve your financial difficulties, feel free to contact D. Thode & Associates Inc.