While the residents of Calgary, and other cities in Alberta, make among the most money in the country, they also struggle with debt. It is common for Calgary residents to carry a lot of debt compared to the national average and have a growing problem with delinquency and defaulting on their loans.
If these debt-related problems persist for individuals, it can lead to a point where a person requires outside assistance from a debt relief provider. One of the debt relief options they might suggest in a particularly tough situation is a consumer proposal.
What happens to my debt when I file a consumer proposal? Click here.
What is a Consumer Proposal?
A consumer proposal is basically a request to your creditors asking to either pay back a certain amount of your debt, with the rest being forgiven or to extend the time frame you have to repay them. The amount you repay will depend on a number of things like how much debt you have, how much money you make, and what you own.
Filing a consumer proposal in Calgary will also allow you to keep your assets, while still stopping harassing phone calls and wage garnishments, so it is often seen as less extreme than a bankruptcy. Furthermore, not all debt can be removed in a consumer proposal, such as secured debts, student loans, alimony, and child support.
Of course, your creditors are not forced to accept your offer, so you need to not only make them a fair deal but also make it clear that you will have no reasonable way of paying back the total amount you owe them.
Check out this infographic to learn how to create a debt-free plan. Who Is In Charge of Consumer Proposals in Canada?
In order to go through the process of a consumer proposal, you need to enlist the help and services of a Licensed Insolvency Trustee (LIT). These are professionals who have gone to school and are educated and trained to oversee the filing of consumer proposals and bankruptcies in Canada.
These experts are regulated by the Office of the Superintendent of Bankruptcy Canada, which is a branch of the federal government. Many LITs work for themselves, but there are also plenty who work for a firm. In addition to assisting you in filing a consumer proposal, they will also be able to suggest other debt relief options as well as answer any questions you may have on the process or situation.
Does a consumer proposal affect your credit score? Find out here.
The Consumer Proposal Process in Calgary
Now that you know what a consumer proposal and a LIT are, what is the consumer proposal process like in Calgary? Well, first of all, you need to have an initial meeting with your LIT. In this meeting, you will supply them with all the necessary financial information that they need. From there, you two will create a proposal based on factors such as your debt, your financial situation, and your needs.
Once the proposal has been finalized, your Calgary LIT will send the proposal to your creditors and then you will need to wait for approval or denial. Of course, the creditor that holds the most of your debt must agree to the proposal for it to ever get off the ground.
When your proposal is accepted, you have five years to make payments and pay back the agreed upon amount in your proposal
Of course, there is no guarantee that your scenario will play out completely by the book, depending on your unique situation and the makeup of your debt. Either way, your Calgary LIT is qualified and well-suited to help you out and answer any questions you might have about the process.
When is Filing a Consumer Proposal the Right Choice?
There are many different debt relief options that are available to you in Calgary, and choosing which to go with is not always easy. So how do you know if you qualify for a consumer proposal and if it is the right choice for you? Well, a consumer can be the right choice if:
- You have debts over $5000, but under $250,000, not including mortgage debt
- You have a decent job and a solid income and can afford to make monthly payments
- You do not see a reasonable way that you will be able to pay off your debts in full
- You do not want to go bankrupt and are not able to qualify for a debt consolidation loan
Of course, before you ever make a choice on which debt relief option to choose, be sure to speak with your LIT to ensure that it makes sense for your unique needs and situation. A consumer proposal is a relatively extreme debt relief option in Calgary, so considering others like debt settlement, credit counselling, and debt consolidation should take place first.
Can I get approved for a loan while in the consumer proposal process? Click here.
Is a Consumer Proposal Right For You?
If you have more questions about consumer proposals or feel that it is the right debt relief option for you, don’t hesitate to reach out to Loans Canada, we are here to match you with the appropriate experts in your area.
