Consumer Proposal Process
The consumer proposal allows you to make an offer to the people you owe money to, paying a lump-sum or an amount over time. The amount you offer could be as low as $85 per month or as much as the full amount you owe (though stopping interest charges and collection efforts) depending on your specific financial situation. In a consumer proposal, you benefit from keeping all of your assets. Unlike a consolidation loan, you don’t need to qualify to file a consumer proposal. The costs of a Trustee and your counselling sessions are included in your proposal offer.
Consumer proposals can only be filed by a licensed insolvency trustee, like Krieger & Company. Nobody other than a licensed insolvency trustee can file a consumer proposal for you and nobody should charge you money solely to introduce you to a trustee.
1. Talk to Krieger & Company
While we’ve done our best to answer the most common questions on our Web site, sometimes you just want to know a little bit more. Your time is valuable. Give our office a call or send us an e-mail to ask questions about your debt, absolutely free of charge. We know that once you see the effectiveness of the consumer proposal process and the way we talk to you about your debt, you’ll want to come see us.
2. Come learn about all of the possible solutions to your debt challenges
A licensed insolvency trustee is required to explain all of the available options specific to your unique circumstances. This can include bankruptcy, consumer proposals, debt management plans, consolidation loans, or credit counselling to help you on the path to financial recovery. Your meeting is totally confidential unless required by law. You are never under any obligation to sign anything and we never charge for an initial consultation.
3. Preparing a consumer proposal
After we’ve explored all of your options, maybe a consumer proposal is the perfect fit to take control of your financial situation. By now you’ve learnt about how a consumer proposal can stop interest, let you pay less than you owe, and allow for payments over time without having to borrow any money.
Your Trustee will prepare the proposal with you. Your proposal is like your contract with your creditors. It sets what you have to pay and tells your creditors when they’ll get their money. We’ll also gather any remaining supporting information which we need to recommend your consumer proposal to your creditors.
4. Filing of a consumer proposal
The consumer proposal is filed with the Official Receiver making your proposal official. Collection calls and bills will stop immediately and any lawsuits or garnishments are stayed (halted). Generally, you begin making your proposal payments at this time. The costs of making the proposal are all included in your proposal offer.
With your phone silent, no bills coming in, and no bill payments to make, you might think something is going wrong. The good news is, the gears are turning behind the scenes. We’re working with your creditors as they review your consumer proposal and vote on your proposal. This process lasts 45 days. After 45 days, either your proposal is accepted, or we hold a meeting of creditors.
6. Possible meeting of creditors
In most cases, a meeting of creditors is not necessary. Most proposals we file are handled without the need for a meeting. That said, if a quarter in dollar value of your creditors wish to hold a meeting, a meeting of creditors is then called within three weeks. In most cases, your Trustee will discuss the concerns raised by your creditors ahead of the need to call a meeting and work with you to resolve any concerns that they have ahead of time.
7. Acceptance of your proposal
If there wasn’t a need to call a meeting (less than 25% in dollar value of your creditors requesting a meeting) or if a meeting is called and over half of your creditors in dollar value vote in favour of your proposal at that meeting, your proposal is deemed accepted and considered final 15 days later. If your proposal is fair and reasonable, it is extremely rare that your proposal won’t be accepted.
8. Fulfill your obligations
Your consumer proposal contains obligations which you have agreed to, usually just to make payments to the proposal for a period of time. Sometimes there can be additional terms in your proposal which you have agreed to. Irrespective of the terms unique to your proposal, you are required to attend two one-on-one counselling sessions which help you budget, manage your finances, and build your credit. Your Trustee at Krieger & Company will provide the required counselling services free of charge.
9. Be Debt free
Once you fulfill your obligations, you receive a Certificate of Full Performance of Proposal. When the Trustee issues this certificate, you are discharged of all of your debt. Certain limited exclusions apply which your Trustee will discuss with you including support obligations and recent student loans. We will also remind you of the topics we discussed at the counselling sessions to help further improve your credit score and avoid future financial struggles.
10. Stay debt free
Krieger & Company will meet with you for a complimentary third counselling session after your proposal is has been fully performed at any of our resident offices to make sure you’re on the best financial track to save for the future.
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