Charla Smith & Company

Consumer Proposal

Consumer Proposal

If your debt (not including any mortgages on your home) is under $250,000*, a Consumer Proposal may be the best way to get relief. A Consumer Proposal allows you to consolidate your debts while avoiding filing for bankruptcy or losing your assets. You usually repay only a portion of your debt while the rest is forgiven. The amount you pay is based on your ability to pay, not on how much you owe

*Note: If you owe more than $250,000 in (non-mortgage) debt, there is a similar solution called a Division I Proposal which we can also provide.

Calgary Licensed Insolvency Trustee Charla Smith & Company can help determine whether a Consumer Proposal is the right option, and we have the expertise and experience to arrange and administer your Consumer Proposal without the need for you to engage a debt consultant.

Is a Consumer Proposal Right for You?

Canadian law allows individuals struggling with less than $250,000 in (non-mortgage) debt to make a Consumer Proposal to their creditors to obtain debt relief while avoiding bankruptcy or losing their assets. (Those with more than $250,000 may qualify for a Division I Proposal, which we are also licensed to provide.)

A Consumer Proposal is a legal process to negotiate an extension of time and/or a reduction of debt with all your creditors at once. It stops interest from accruing and includes a ‘stay of proceedings’ which stops creditors from taking any further action. Even a creditor that objects to this proposal will be required to abide by it if the majority of other creditors have agreed. 

We will work with you to determine whether a Consumer Proposal is your best option, and if it is, we will collaborate with you to develop a proposal to creditors that is achievable for you. Then we work with your creditors to help them understand your proposal and why we recommend they accept it.

We are with you every step of the way to make sure your proposal has the best possible chance of success and we never lose sight of your goal of achieving freedom from the stress your debt is causing you.

 

Consumer Proposal Benefits and Impacts

A Consumer Proposal is not the right solution for everyone, but we can help you determine whether it is the best option for you. 

The benefits of Consumer Proposals may include: 

  • stopping interest from continuing to accrue
  • reducing the amount of debt you have to repay your creditors 
  • a more manageable timeframe for repayment
  • consolidation of your debts despite the fact that you may not qualify for a traditional consolidation loan
  • requiring a small but hostile creditor to accept the proposal if the majority has approved it  
  • avoiding bankruptcy or losing your assets

There are a number of impacts to consider when comparing the Consumer Proposal route to other options:

  • only a Licensed Insolvency Trustee can administer a Consumer Proposal
  • you must be able to keep up with the payments - missing more than 2 payments could result in starting from scratch
  • there will be a public record of the filing of a Consumer Proposal and it will impact your credit rating for a period of time 
  • payments are typically greater than what you would have to pay in a bankruptcy

At Charla Smith & Company we understand what a burden the stress caused by debt can be and are here to help you understand your options and move forward when you are ready.

Get Relief From Your Debt

Debt happens, and we know there are many reasons why people get into financial difficulty. At Charla Smith & Company our job is not to judge but to help. We will discuss your debt solutions in a way that respects your dignity and acknowledges your unique circumstances.

Our small team of insolvency professionals provide financial advice and are licensed to provide a consumer proposal or bankruptcy if appropriate. 

We’re here to answer questions, guide, and advise so you can take back control of your financial situation. Complete this contact form or call us at 403-899-3890‌ today for a FREE no-commitment consultation.

We’re Here to Help 

The stress caused by overwhelming debt can affect all facets of your life. While it may sometimes feel like there’s no way out, we can explore options with you that will provide relief from your debt.

We at Charla Smith & Company can help you determine whether a Consumer Proposal is the right solution for you to get your financial situation back on track. We’ve had the privilege of helping many individuals just like you by educating them about their options, providing advice and guidance based on our experience, and following through on implementing whatever solution is the best fit.

We're here to help you reclaim control of your finances. Call us at 403-899-3890 for a free and confidential consultation.

Frequently Asked Questions

Q: How much does a Consumer Proposal cost and how do your fees compare to what others charge? 

A: The amount you will pay to your creditors depends on a number of factors unique to your situation, such as your income and your assets. Only a Licensed Insolvency Trustee can administer a Consumer Proposal. The fees paid to the Licensed Insolvency Trustee are based on a calculation set by the government, so the fee would be the same regardless of which Licensed Insolvency Trustee firm you choose to work with. 

There is no need to pay a debt consultant to see a Licensed Insolvency Trustee. Our government-calculated fee includes all of the work to review your situation, prepare your proposal, and help you get through the process.


Q: What does the process for making a Consumer Proposal look like? 

A: The process for making a Consumer Proposal is standardized, in accordance with rules and procedures set out in the Bankruptcy and Insolvency Act of Canada. This means it is transparent and predictable, which is good for you and for your creditors (which makes them more likely to accept your proposal). Essentially, you work with your Licensed Insolvency Trustee to prepare documents for your creditors, explaining your situation and your proposal. Your creditors then vote on the proposal and, assuming they vote yes, you follow through on the proposal, including making the payments it sets out. 


Q: Why a Consumer Proposal, rather than debt consolidation? 

A: Debt consolidation may be a good option for you, and if so, we would advise you of this during the Financial Assessment stage. However, debt consolidation doesn’t have many of the important features of a Consumer Proposal, which include: providing a legal 'stay of proceedings' immediately stopping actions your creditors might be taking, and dealing with all of your unsecured debt. Debt consolidation also does not allow you to reduce the amount you owe, which may be necessary if your debt level is unmanageable.

For more information on this topic, check out our blog post entitled: Consolidation Loans: the Good the Bad and the Ugly

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Charla Smith & Company Ltd.

Charla Smith & Company Ltd.

Let us help you get relief from the burden caused by your debt. As a Licensed Insolvency Trustee, Charla Smith & Company are highly trained and experienced in debt relief solutions, and we take great pride in identifying the option that's the best fit for your unique situation. From advice on talking to your creditors to consumer proposals to bankruptcy and everything in between, we’re here to answer questions, guide, and advise you so you can take back control of your financial situation. Serving Calgary, AB and surrounding areas.

Your Trusted Choice for Debt Resolution

Using our experience and a caring approach, we will help you find tailored solutions specific to your unique needs - from advice on talking to your creditors to bankruptcy, and everything in between. We are here to relieve you from the burden of overwhelming debt. 

Our business is built on referrals, and referrals are built on trust. Contact us today at 403-899-3890 for a FREE no-commitment consultation, and let us use our trusted approach to help you regain your financial footing.

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