Consumer Proposals

Consumer proposal, only available through Licensed Insolvency Trustees, is the top alternative to filing bankruptcy in Vancouver. The legal procedure allows you to settle your financial obligation for less than you owe with the help of a gov’t Licensed Insolvency Trustee, by discussing, formulating and implementing a compromise (deal) with your creditors while under court protection preventing them from exercising their normal rights ­everything stops, including collection action unless specifically exempted, like child support. Consumer proposals can only be filed by a gov’t Licensed Insolvency Trustee in British Columbia, sometimes called a bankruptcy trustee, and, truth be told, consumer proposals have considerable benefits over debt consolidation, credit counselling or debt pooling, management programs, as well as bankruptcy.

If you select this debt relief restructuring option, Westgeest & Associates will work with you to develop a plan, a proposition, proposal: an offer to pay your creditors a portion of what they are owed, including any other term(s), condition(s) required to see, foster the proposal to completion over a period extending up to five (5) years, and present, negotiate and administer the plan with your creditors.

The result is a legally binding gov’t, court sanctioned, supervised contract (think of it as a court imposed free consolidation loan to settle reduced debt once and for all without having to go out and find expensive new money people may not be prepared to lend you anyway or go bankrupt) providing you instant relief from debt collection and a manageable arrangement for some repayment of your debt under terms you can meet, afford. Payment is made to Westgeest & Associates as administrator of the proposal, and the administrator uses the money to pay each of your creditors. One (1) monthly payment reduces and tames your debt without another expensive consolidation loan you may not be able to afford anyway, as consumer proposal debt settlements reduce debt to a manageable level that does not grow, as they typically do not include a provision to pay interest.

When you file a consumer proposal, you consent to pay a portion of what you owe and your creditors consent to forgive the balance, take a hair cut. This effective gov’t debt relief, financial restructuring option has progressively gained appeal since implementation in 1992 given its clear advantages over provincial debt pooling of all stripes.

You may be wondering what happens when you file a consumer proposal. There is an evaluation of your debt repayment ability under the law, your debt relief, financial restructuring options, and the following will occur:

  • Includes your full financial disclosure of monthly income and expenses, capital, assets (and their value to creditors in liquidation, if any, after subtracting prescribed, legislated amounts of exemption for household goods, furniture, clothing, car, tools of the trade, medical aids, home, life insurance, pensions, RRSP’s, etc.), and debt – no favoritism allowed.
  • Lawsuits, pension and wage garnishments and executions against assets and bank accounts stop on filing, with the exception of child support.
  • Interest stops building upon accepted proposals from the date you file your consumer proposal, making it possible to see real progress, reduction in your already “reduced” debt with each payment made – in like amount to the actual consolidated, monthly payment made – unlike what you previously experienced with minimum payments on your credit card that never seemed to reduce the balance owing, leaving you more despondent with each passing month and year.
  • Collection companies, lenders, and tax department collectors no longer call you for payment.
  • You are not in jeopardy of losing your home or other possessions.
  • Qualifying individuals generally pay back only a part of their financial debt within a maximum repayment period of five (5) years, with one (1) regular consolidated, monthly payment you can afford.
  • If you owe ICBC, an accepted proposal can hasten your way back to a license, as well as employment requiring a driver’s license.
  • If your student loan is off track with payment accelerated or subject to third (3’rd) party collection, a consumer proposal is a readily available financial restructuring tool to reintroduce order into your budget and life and provide for the eventual elimination of your student loan.
  • Essentially, the service is free to consumers as creditors pay for the service rendered to you by Westgeest & Associates, your gov’t licensed Trustee in Insolvency and Restructuring, out of their reduced recovery under the consumer proposal.

A consumer proposal in Vancouver provides a method for dealing with (taming) unmanageable financial obligation and can be an effective debt relief, financial restructuring tool to avoid bankruptcy, can readily be made by any individual who owes between $1,000 and $250,000 excluding mortgage(s) on your home, cannot repay under existing terms, has ceased payment, and whose property at liquidation value (auction price) after deducting exemptions in prescribed, legislated amount for furniture, household goods, clothes, car, home, RRSP, pension, life insurance, tools of the trade, medical aids, etc., is insufficient to repay the debt.

It is important to work with skilled experts to give yourself the best chance at restructuring your debt to a level you can afford under conditions you can fulfill over a reasonable period of time, not to exceed five (5) years. Should payment need to extend beyond five (5) years, a Division I proposal is available –­ a more complicated financial restructuring procedure involving the possibility of ‘enforced’ bankruptcy with greater creditor involvement possible. Whereas consumer proposal presents no such danger, angst, leaving you free to explore creditor tolerance while in control throughout the period of the consumer proposal provided payment is made in amount and time agreed.

An individual’s value to his creditors at time of filing a consumer proposal comprises his assets valued at liquidation (auction) pricing (that may be a garage sale for your furniture and household goods, the wholesale cash buyer for your car, or the pawnbroker for your jewellery) after deducting exemption in prescribed, legislated amount(s) for car, household goods, clothing, tools of the trade, medical aids, home, life insurance, pensions, RRSP, etc., which amounts to little or nothing for the large majority of us, less than our debt in any case. More often than not, subject to monthly income and family responsibility, qualifying an individual making a consumer proposal for a nine (9) month bankruptcy followed by automatic discharge without a court hearing, should he or she elect. Those are the odds faced by creditors asked to consider a consumer proposal, predisposing them to accept a reasonable settlement offer in the common sense belief that something voluntarily is better than nothing forcibly.

If you would like more information about consumer proposals in Greater Vancouver or need help figuring out if you qualify, a simple next step is to get in touch with Westgeest & Associates, your gov’t Licensed Insolvency Trustee, for an individual, private conversation, assessment. We will discuss the advantages of filing a consumer proposal with you. The amount of your overall debt and ability to repay something acceptable to creditors determine success and if you qualify. We look forward to hearing from you.

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