Consumer proposals are the debt solution for consumers because:
- avoids bankruptcy
- keep all your assets
- protects your pay cheque
- you’re out of debt in 5 years or less
- saves thousands of dollars
Consumer Proposals
Financial debt relief while protecting your belongings & paycheque.
Why a Consumer Proposal?
In a consumer proposal, outstanding debts and credit card bills can be reduced 70% or more. Interest, fees and garnishments are stopped, you keep all of your belongings.
What is a Consumer Proposal?
Consumer proposals are:
- a government program
- to reduce & consolidate debt
- over a 3-5 year period
In a consumer proposal, an insolvency trustee negotiates a reduction of the amount of debt you owe to creditors.
For example, suppose you owe $25,000 in credit card debt. In a consumer proposal, the trustee would contact your credit card company and negotiate the amount being reduced up to 70% or more.
Your $25,000 in debt would go down to $7,500. The amount would be payable monthly at $125/month over 5 years or less without interest, penalties or fees.
Get started today, We can get you completely out of debt!
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We provide government licensed trustees to help you with your personal finances.
Consumer Proposal Advantages
The benefits of a consumer proposal are:
- debt is reduced dramatically
- collection calls & actions are stopped
- low monthly payment to the trustee
- no up-front cost to you
Once a proposal is accepted, the outstanding balance of your loans and debts are forgiven.
★★★★★ The interest and payments on our credit card just kept on going up, then the collection calls started. My friend told my about YanchDey, I called and spoke to Kelly who explained how she could help with a consumer proposal. We saved over $30,000, we now pay $250/month and will be debt free in 5 years! Andrea R. Oshawa
Who Qualifies for a Consumer Proposal
Consumer proposals are a federal debt relief program available to:
- residents of Canada & property owners,
- that are insolvent (cannot pay their bills),
- who are working or have a source of income, and
- owe more than $10,000 & less than $250,000
Most people will qualify for a Consumer proposal, businesses are not eligible for consumer proposals. Any previous consumer proceedings must be closed.
All unsecured debts, credit cards and unsecured loans can be applied to a consumer proposal, getting you completely out of debt in 5 years or less!
How a Consumer Proposal Works
A consumer proposal is a legal agreement administered by a Licensed Insolvency Trustee.
You start a consumer proposal by calling our office and speaking with a trustee. All consumer proposals in Canada must be prepared by a Licensed Insolvency Trustee.
The trustee will document your bills, expenses and income. From these amounts together with the trustee a plan will be made for you to pay back only a percentage of the amount you owe.
The monthly payment is based upon what you can reasonably afford to pay taking into consideration your income and expenses.
Many clients tell us, the hardest part of the consumer proposal was making that first call and talking about their debts.
Is a Consumer Proposal Worth it?
Consumer Proposals are worth doing for three main reasons:
- the proposal will get you out of debt
- your debts may be reduced up to seventy (70) percent (minimum)
- stress will be dramatically reduced in your life
- you get a fresh start
You’re not alone, many people ask themselves “is the process worth it”, but the answer is yes.
Where you’re having issues with debt, a proposal is one of the best things you can do to help yourself.
You won’t be alone, at Yanch Dey we’ll be doing all the paperwork, explaining the process and helping you along the way. It’s a process that we will go through together.
★★★★★ My husband was laid off, but our bills kept coming, we were drowning in debt. The consumer proposal solved our money problems and saved us $18,000. We will be debt free in four years, Thank you Susan N. Oshawa
Starting a Consumer Proposal
In a consumer proposal you’ll be out of debt in 3-5 years.
Once a consumer proposal is filed, you are covered by consumer protection. Consumer protection means, creditors (including credit card companies and people owed money) must stop all collection actions against you.
Includes harassing calls, garnishments and lawsuits.
The debtor (person who owes money) pays no fee, up-front or otherwise to file a consumer proposal.
When you file a consumer proposal, you and the administrator work out what you can reasonably afford to pay on your debt.
The insolvency trustee then takes that amount to your creditors and negotiates a settlement.
The cost of the consumer proposal comes out of the money going to the creditors.
There is no other fee or cost to you.
You qualify for a consumer proposal where:
- you owe more than $10,000 and
- less than $250,000 in debt
- you are working, or have a steady source of income
- you’re a Canadian resident
Persons who are permanent residents or living in Canada under a work permit or similar may apply for a consumer proposal.
After a consumer proposal has been filed and accepted, creditors must follow the rules set by the government, such as:
- creditors are prohibited from contacting you
- no interest, late payments or fees can be added
- all civil actions and wage garnishments are stopped
The payments you were making to creditors stop. Instead of making individual payments, one monthly payment is made to the Trustee.
The trustee acts as your representative, distributes the money and deals with creditors in all matters, not you.
People contemplating insolvency may already have a poor credit rating and debt problems.
Where a person declares bankruptcy or submits a consumer proposal they are assigned the lowest possible credit score.
- Equifax removes a consumer proposal from your credit report 3 years
- after you pay the accepted consumer proposal amount.
TransUnion removes a consumer proposal from your credit report either:
- 3 years after you pay off the accepted consumer proposal amount, or
- 6 years after you sign the proposal (whichever is sooner)
Your ability to obtain and use credit after a consumer proposal depends on convincing lenders of your personal financial maturity and ability to repay the debt; there are no guarantees—no one is required to give you credit.
Once you have fulfilled the terms of your consumer proposal, you will receive a “certificate of full performance” to present credit-reporting agencies.
★★★★★ We spoke to a consumer credit counseling agency that recommended YanchDey. Making payments on our personal loans plus my unpaid student-loan debt left us with little at the end of the month. The proposal was the best debt management program for us, paying off our debts in 5 years. We’re even saving money now to make a lump sum payment! Thank you NameWithheld, Oshawa.
How to file Consumer Proposals
Making that first phone call is the first and hardest part of the process.
The first step to debt relief and filing a consumer proposal is to speak with us. We’re an office of friendly and professional people, we’re more than happy to speak with you and tell you all about consumer proposals.
There is no obligation or cost to speak with an insolvency trustee.
Once you’ve had that initial conversation and would like to proceed, we’ll invite you to come and discuss in detail your financial situation.
Step 2 - Creating a Debt Reduction Plan
Your first meeting with the trustee is a discussion about your debts and unsecured credit including:
- who do you owe money to:
- credit cards
- student loans
- taxes owed
- utility bills
- what is the current balance owing
- what are your sources of income
Many times our clients find it easier to bring in the documents or bank statements for each debt so we have accurate amounts.
During this discussion the trustee will be looking to create a repayment and financial plan based upon:
- your income
- what you own, and
- who you owe money to
- what you can afford to pay
- determine how much to offer your creditors, and
- how much your monthly payments should be
Step 3 - Preparing the Documents
The trustee takes the information about your debts. This information will include:
- your current finances
- how long the proposal will last
- how much you’re able to pay on the debts
- the monthly payments you’ll make
The trustee completes all of the paperwork and submits the proposal on your behalf.
Step 4 - Submitting the Proposal
Once the proposal is completed the trustee files it with the office of the Superintendent of Bankruptcy.
After the application is accepted a stay of proceedings is issued.
A stay of proceedings means that any creditors must:
- deal only with the trustee
- cannot contact you for collection
- any wage garnishments are stopped
Step 5 - Notification to Creditors
After the proposal is filed the trustee sends notice to the creditors.
The creditors may ask for a meeting to discuss the terms of your proposals and ask any questions.
This does not always happen but if it does the trustee will hold the meeting and guide you through the process.
The creditors have 45 days to decide whether they will accept the proposal or ask for a creditors meeting. If no meeting is requested after 45 days the proposal is deemed to be accepted.
Should any creditors contact you, they should be directed to speak to the trustee.
Step 6 - Creditor Meetings
Where a meeting has been requested the creditors have an opportunity to:
- ask you questions
- reject the proposal, or
- negotiate for a better offer
The trustee will chair the meeting, report to the creditors on your affairs and explain why the trustee feels the proposal deserves their support.
Where the creditors vote no, your options are to:
- renegotiate the proposal
- withdraw the proposal
- file for bankruptcy
In a renegotiation the creditors may ask for higher payments or reduce the term of the payments, e.g from 5 years to 4 years.
Where a meeting is not requested the proposal is deemed to be accepted after 45 days.
Step 7 - Consumer Proposal Acceptance
Where the proposal is accepted you start making the monthly payments on the proposal.
You are required to attend two credit counselling meetings with the trustee and an online program. The counselling is to help you going forward dealing with credit.
After the proposal has been completed you receive a certificate of completion.
The certificate of completion shows that the terms of the proposal have been completed and that the debt(s) have been cleared.
Step 8 - Rebuilding Credit
After completing the consumer proposal, Equifax credit reporting agency removes the consumer proposal from your credit report 3 years after you’ve completed all of the consumer proposal payments.
TransUnion removes a proposal from your credit report either:
- 3 years after you’ve completed paying all of the consumer proposal payments, or
- 6 years after you sign the proposal (whichever is sooner)
While in the proposal you can obtain a secured credit card. We suggest that you look for a credit card with a maximum credit limit of $500.
The credit card has to be paid off each month completely. The proposal will affect your credit score, but where you’re paying off the balance each month the credit rating will improve.
We also suggest that clients use this time to try to build up savings, as they do not have the high loan payments they were making previously.
Consumer Proposal Ontario | Consumer Proposals
