Consumer Proposal FAQS
- What are the main benefits of a proposal?
A consumer proposal is a great alternative to bankruptcy. In a consumer proposal you:
- You keep your assets
- You only make one low monthly payment
- It is a government regulated program
- Provides you creditor protection
- Interest is typically reduced to 0%
- It is open-ended and can be paid off early, if you wish, with no penalty
- Avoid bankruptcy.
- What is the difference? Is this not just like bankruptcy?
A consumer proposal is filed under the same act as bankruptcy the differences are:
- You do not lose any assets in a proposal
- You do not have to report your income and expenses every month in a proposal
- It only stays on your credit for 3 years once completed
- In a proposal, you are awarded all the same protections as you would have in a bankruptcy without all the negatives because you are voluntarily paying back a portion as opposed to throwing the towel in like in a bankruptcy.
- So how much will I have to pay in a proposal?
You will only pay back a fraction of what you owe. On average you will pay back 30-35% of what you owe with 0% interest over a period not exceeding 60 months. Once you get your free analysis done by one of our agents, we can get you some solid numbers based on your specific situation tailored to fit your budget.
- Will my proposal be accepted?
Our acceptance rate is 99%, Creditors would rather get back a portion of what is owed versus little to nothing in a bankruptcy.
- How long does it take to file my proposal?
If you are organized the process can take as little as a week or as long as it takes for you to gather the information required to file your proposal.
- What information is required to file my proposal?
There are quite a few documents and a fair amount of information that needs gathering. Your CCDR Debt help specialist will coach you through the entire procedure making your filing successful.
- How long does a proposal go?
Payments can be spread over a period of up to 5 years. Yes, you can pay it off early if you wish as well (no penalty)
- Do I have to include all my debts?
Yes, all your unsecured debts must be included in your proposal.
9. Do the creditors get a say?
Yes, Once your first payment is made and the consumer proposal is filed, your creditors have 45 days to respond with their votes.
10. Can Revenue Canada tax debts be included in my proposal?
For sure! Revenue Canada Tax debts are unsecured and the CRA is bound by the terms of an accepted proposal.
11. Can my wages be garnisheed while on a proposal?
No; A consumer proposal is a legal proceeding under the Bankruptcy and Insolvency Act and provides a stay of proceedings which will stop all collection actions.
12. Will collectors continue to call after my proposal is filed?
Not unless they are unaware of the proposal or they choose to break the law.
13. What are my responsibilities as a consumer while on a proposal?
- Make all the required payments in your proposal
- Go to 2 short credit counseling sessions
14. How long does my proposal show on my credit report?
That’s up to you. A proposal will show on your credit report for 3 years after it is complete. If you take the full 60 months to pay that would be a total of 8 years. If you pay it off in 2 years it would only be a total of 5 years.
15. Can I miss any payments?
Yes, you can miss 2 payments which must be made up later without any consequences. If you miss 3 payments your proposal will be automatically annulled. This means that your proposal would be canceled, and your debts would be reinstated in full. Your creditors will begin to call and restart collection activity. All payments made during the proposal will be lost.
16. Can my proposal eliminate student loan debt?
Certainly, your student loan debt can be included in your proposal if it has been more than 7 years since your last date of study.
17. Can my credit be rebuilt after my proposal is complete?
Yes, even with a proposal on your credit report you can still receive new credit at decent rates. Once your proposal is complete we can help you rebuild your credit at no additional cost.
18. Do creditors often reject a consumer proposal?
The good news is creditors accept most consumer proposals. Rejection does happen, but usually, the creditor will offer to accept a different amount as not doing so would generally push a consumer to a bankruptcy where they typically get little to nothing.