Is a Consumer Proposal the Best Debt Solution for You?

If a heavy debt load is threatening your financial security, considering a debt solution like a consumer proposal can make your finances more manageable.

How a consumer proposal helps you resolve your debt

Unsecured debt (such as payday loans, lines of credit, credit cards, unpaid income taxes, etc.) often comes with high interest charges. As these debts accumulate, it can become increasingly difficult to keep up. In this case, a consumer proposal may be the best debt solution for your situation.

A consumer proposal is a formal, legal agreement between you and your creditors that reduces the amount of debt that you owe. Only a Licensed Insolvency Trustee (or LIT) — a qualified, government-licensed professional — can assist you with filing a consumer proposal.

During an initial meeting with an LIT, he or she will review your financial situation and explain all available debt solutions. If you decide to proceed with a consumer proposal, the LIT will communicate directly with your creditors and negotiate an agreement on your behalf, ensuring that the reduced amount is fair for your creditors and affordable for you.

What you should know about filing a consumer proposal:

· Your must owe less than $250,000, excluding your mortgage, to qualify to file a consumer proposal.

· During the consumer proposal process (up to five years), you will make monthly payments to your LIT, who will distribute those payments to your creditors.

· You will not lose any of your assets, which means you will keep your home, vehicle, RRSPs and other belongings.

· You receive protection from your creditors and collection agencies the day you file – putting a stop to interest, wage garnishments, and harassing phone calls.

· Any fees you pay are included in your monthly payment. There are no additional fees.

· A consumer proposal will affect your credit rating for three years. However, a proposal only affects the person who files, meaning it will not affect your spouse’s credit rating.

A consumer proposal can help you refocus on your financial goals

If you have been struggling to keep up with your debt, you likely have other financial goals that you have put on hold. Credit counselling is an important part of the consumer proposal process that can help you refocus on those goals.

Once you file a consumer proposal, you will attend two counselling sessions that will include tools, resources and advice on how to rebuild your credit and manage your money. Instead of dealing with the stress of mounting debt, you will be free to focus on the financial goals that are important to you, whether it’s building an emergency fund, contributing to your child’s education fund or saving for your retirement.

To learn more about the benefits of a consumer proposal, visit the BDO Debt Solutions website. The Government of Canada website is also a great resource.

November is Financial Literacy Month! Visit us on Twitter and Facebook to learn something new about money and debt management, or simply join the conversation. #FLM2019

BDO First Call Debt Solutions 147-15^th Street East Prince Albert S6V 1G1
Phone: (306) 765-3328 or 1-855-220-1705
https://debtsolutions-princealbert.ca/

Jasmin is a Senior Vice President with BDO and works out of the Saskatoon office. Jasmin received a Bachelor of Arts in Spanish, a Bachelor of Commerce in Accounting and a Masters of Professional Accounting from the University of Saskatchewan.

She is a Chartered Professional Accountant, a Licensed Insolvency Trustee and a Chartered Insolvency and Restructuring Professional

by Jasmin Brown - Licensed Insolvency Trustee

Is a Consumer Proposal the Best Debt Solution for You?

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