If you are a resident of Winnipeg, Manitoba and are looking for an alternative other than bankruptcy, a consumer proposal may be the right choice for you. Consumer proposals are one of the most popular bankruptcy alternatives in Winnipeg.
Below are some things you should know about consumer proposals before making your decision:
- Proposals are ideal for those who can afford to pay back their debts, but need a certain length of time to do it.
- Consumer Proposals are ideal as an alternative to bankruptcy for those with debts in excess of $5,000, to a maximum of $75,000.
- Unlike a debt management plan, consumer proposals are legally binding. They are administered by the courts and a licensed bankruptcy trustee.
- Consumer proposals have a number of advantages, including a maximum period of 5 years, they are usually accepted by creditors, interest is frozen from the date of filing, you can negotiate to only pay a fraction of the debt, wage garnishments end, and your creditors are not allowed to take legal action against you.
- To begin the process, your bankruptcy trustee will review your financial situation to determine how much you can afford to pay back each month.
- Your creditors will have 45 days to decide whether your proposal seems fair to them. If 50% vote in favour of your proposal, it is considered acceptable by all creditors. Most of the time creditors will accept your proposal – they know that they would receive even less if you were to file for bankruptcy.
- If 25% or more of your creditors vote against your proposal, you must attend a meeting of creditors. At this meeting your trustee will help you and your creditors agree on an acceptable proposal.
- If after 15 days there are no objections, your proposal will be approved by the court.
- You can miss up to two payments during the proposal period. Your trustee can easily add two payments onto the end of the proposal in this case. If you miss any more than two, your proposal will be annulled by the court, your creditors will be able to apply to have your wages garnished, and interest charges will be added to all debts.
- Your credit rating will be adjusted to reflect your financial situation immediately after you file. It will likely remain that way until the proposal is complete. You will also have a note of the proposal on your credit report for up to seven years from the date of filing.
- Trustee fees are designated by the Superintendent of Bankruptcy, but for the most part the trustee will be paid from the proceeds of the proposal.
If you have read through this list and feel that a consumer proposal would be a good option for you, please contact our Winnipeg bankruptcy trustees office immediately and book a free consultation. Consumer proposals are just one of bankruptcy alternative available in Winnipeg, and our licensed trustees in Winnipeg can review the full list of options (including Debt Consolidation, etc.) with you before you make your final decision.
