Deciding whether filing a consumer proposal is the right choice for you can be a big decision and a stressful one at that. Regardless of the outcome, a good place to start is by meeting with a Licensed Insolvency Trustee (for more information on L.I.Ts, click here). Then, together, you can complete an assessment and determine what the best debt relief option for your unique situation is. When you are faced with serious financial issues, a Licensed Insolvency Trustee should be considered one of your best, resources.
Your first meeting with a Licensed Insolvency Trustee is called an initial assessment. This meeting is always free and without any obligations. It’s simply meant to make sure that a consumer proposal is in fact, your best option.
A consumer proposal can be understood as an alternative to personal bankruptcy. It is effectively an agreement between you and your creditors. Your creditors will agree to your terms if they are fair enough. A Licensed Insolvency Trustee will create, mediate and file your consumer proposal.
Your trustee will create a proposal and present it to your creditors. If creditors that represent 50% or more of your debts accept your proposal then the rest must cooperate. Typically you only need to pay back a certain percentage of your total debts in easy to afford monthly payments. You’ll also have a total of 5 years to complete your proposal.
During your initial assessment meeting, your trustee will review all details of your financial situation. You will need to provide the following information:
This is the information that you will without a doubt need to provide your trustee at your initial assessment. However, you will also need to provide a variety of other information at various times during the creation of your consumer proposal. You should prepare the following information:
After your trustee has assessed your personal financial situation they will be able to provide you with information concerning all of your options, including a consumer proposal.
It’s possible that after your initial assessment has been completed that your trustee will suggest alternatives to filing a consumer proposal. Here are some of the alternatives that may be presented to you are:
Always keep in mind, the more information you can provide at this meeting, the more accurate the outcome of the assessment will be. After having spoken to you along with a thorough review of your situation, the trustee will then explain certain options to you.
As listed earlier, there will be quite a range in terms of options. It is very important to weigh each option closely. Once you have completed this initial assessment, you will have a much better understanding of where you’re standing financially; along with which alternative will likely be the most appropriate.
The purpose of this assessment is to evaluate your financial situation and to have your options laid out. Also, being able to discuss each option with your trustee is very important. This being said it is important to find a trustee that you have a good rapport with. If you feel you don’t want to work with whomever you meet, you can always arrange to meet with another trustee.
When it comes to this process, everyone acts differently. Some people will make an immediate decision based on the list of options they just read. Others will require a lot more time and want to weigh the pros and cons of each option. Always remember that this is your life so it’s your decision. The Licensed Insolvency Trustee is there just to help you weigh these pros and cons, not to push you in a certain direction.
Loans Canada can help find the best trustee in your area, give us a call today.
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Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.
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