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Consumer Proposal Overview
Consumer Proposals: Why Krieger & Company
You’re not alone. Many Canadians are facing the same financial crisis. With mounding debt, it’s time to take control. No matter what brought you into debt, Krieger & Company can help you get out of it. We’re ready to review your options, including consumer proposals, through a phone call or at one of our offices across Southern Ontario. Call us toll-free today at 1 (844) 508-8088. Starting the consumer proposal process today with Krieger & Company can:
- Help you get out of debt sooner by paying less than you owe
- Let you keep all of your assets & extend your time for repayment
- Freeze collection calls and garnishments
How Does A Consumer Proposal Work
A Licensed Insolvency Trustee, like Krieger & Company, conducts a full assessment of your financial situation and helps find the right solution to your financial troubles and right amount to offer. Once we answer all of your questions, we prepare and file your consumer proposal. Your creditors will stop sending you bills, and collection calls, collection letters, and garnishments stop. You can rest easy on the path to being debt free.
Consumer proposals are like a contract with your creditors. The consumer proposals state what you are going to pay, when and who is going to receive money, and has some standard terms. We paint a picture of your financial situation for your creditors and explain why your consumer proposal is a win for everybody. The Trustee tallies the votes on your consumer proposal after 45 days, with the majority of your creditors (by dollar value) determining your proposal’s success. If your creditors vote against your proposal, we hold a meeting and open a dialogue with each of those creditors to address their concerns and reach a solution.
Your role is to keep up your end of the bargain: Make the payments you’re committing to pay, as well as to meet with us for two free one-on-one counselling sessions. We issue a certificate of full performance of proposal once all of the proposal terms have been met. This certificate discharges you from your debt and updates your credit report.
We review a detailed overview of the consumer proposal process to walk through the full life-cycle of a consumer proposal in detail.
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Frequently asked questions about consumer proposals
What will I offer in a consumer proposal?
What you offer in a consumer proposal is unique to your financial situation. Your offer can be as little as $85 per month. Factors which impact how much you offer include your:
- Monthly budget and your ability to make payments
- Household income
- Some of your assets
- The total amount you owe
Through a free consultation with a licensed insolvency trustee at Krieger & Company, we will perform a complete assessment of your financial situation to reach the right offer for both you and your creditors and ensure you know everything about consumer proposals.
How does a consumer proposal affect my credit?
Credit reporting agencies will note your consumer proposal as an R7 on your credit report for three years after it has been completed, or a maximum of six years from when you filed. An R7 rating means that you are making payments through an arrangement with your creditors. Any type of settlement of your debt, other than paying it in full by its due date, will result in this R7 rating.
The R7 rating is only one of many factors which make up your credit score. This rating doesn’t mean that you can not get credit. At Krieger & Company, we will help you to obtain and rebuild your credit and to minimize the impacts of this R7 rating attached to your older debt. You can have good credit while under a consumer proposal.
Do I qualify for a consumer proposal?
A Consumer Proposal can be filed by any person owing between $5,000 and $250,000 (not including their mortgage). If you need help reducing your debt, you quality for a consumer proposal.
Some of these may describe you?
- I have stable income, but not enough to make a dent in my debts and interest.
- We have assets that we don’t want to let lose.
- I want to stop interest from accumulating so I can pay down by debt.
- In our home we only make the minimum payments on our bills.
- We can pay our debts, but just need more time.
- All my money is tied up in my home.
Will I lose my assets in a consumer proposal?
You get to keep all of your assets when filing a consumer proposal. You keep your house, car, investments, jewellery, and retirement savings. Of course, an exception would be if you have a term of your proposal where you are selling a major asset.
What does a consumer proposal cost?
For once, something in life is free. Your licensed insolvency trustee is paid from the payments offered to your creditors. There are no additional fees, expenses, cost of counselling, or other amounts to pay- just the payment you’ve offered to your creditors. Most often, these payments are made monthly to help fit your budget.
What happens to my tax debt & student loans in a consumer proposal?
Government debt like personal income tax, HST from your small business, or liabilities as a director of a corporation are generally included in your consumer proposal. They are treated just like any other debt. The sooner you can address these debts, the more flexibility you have in working with your creditors. Until you file your consumer proposal, the government has special powers to garnish wages and attach your debt to your property.
If you have been out of school for more than seven years, your student loan is included in your consumer proposal. If you haven’t been out of school for more than seven years, a consumer proposal will pause collection activity until you have completed your proposal.