Read on to learn more about how business bankruptcy can be a viable option to get debt relief, and when business bankruptcy alternatives may be a better solution for you and your business.

How Can a Licensed Insolvency Trustee Help my Business?

A Licensed Insolvency Trustee can help your business because in Canada they are the only professionals empowered by the Federal Government to help both individuals and businesses legally restructure and write-off debt. For businesses, these insolvency options include restructuring through the Companies’ Creditors Arrangement Act, receivership, Division 1 Proposal, or bankruptcy.

If you think your business may be in financial trouble, here are some of the areas a Licensed Insolvency Trustee can help you assess and evaluate:

• Financial viability of the business and opportunities for turnaround
• Cashflow and financial statements of company
• Specific creditors the business owners should be aware of
• Pros and cons of restructuring the business

If you are a creditor with an interest in a business, a Licensed Insolvency Trustee may also help you review the business operations, viability and receivership appointments.

What is Business Bankruptcy?

Business bankruptcy is a legal debt solution that business owners may consider when a business cannot pay its debts, and business owners should also consider a Division 1 Business Proposal as an alternative to business bankruptcy.

• Before filing a bankruptcy or Proposal it’s important for business owners and stakeholders to understand the complexities of these processes, including all potential liabilities and repercussions of both unique options.

Bankruptcy for a Sole Proprietorship or Partnership

If your business is set up as a sole proprietorship or partnership you are not legally separated from your business – essentially the assets and debts of your business are also your personal assets and debts.

A business bankruptcy in this case would amount to a personal bankruptcy, or bankruptcy may be avoided entirely if you (the business owner) file a Consumer Proposal instead.

• Filing a personal bankruptcy (or Consumer Proposal) to deal with business (and personal) debts is a relatively straight-forward process.
• You are not required to shut down your business as part of these solutions.

The first step in the bankruptcy process is to meet with a Licensed Insolvency Trustee – there is no requirement for you to consult with a lawyer or accountant to start a bankruptcy.

How Do I Qualify for a Consumer Proposal? Learn More

Bankruptcy for a Corporation or Limited Company

If your business is incorporated, then by law it is considered its own legal entity. Many people think that by setting up a limited or incorporated business they are fully separating themselves from their business assets and debts, but that is not always the case.

Even if your business is structured as a corporation or limited company there is still a personal liability created for certain debts, such as money owing to employees for wages, and to Canada Revenue Agency for GST debt or payroll source deductions.

• Filing a bankruptcy for your corporation does not end the business’ existence; companies are not automatically dissolved because of a bankruptcy filing.
• However, unless the bankrupt corporation is able to later repay all the debts it owed at the time of the bankruptcy filing, it will ultimately cease to operate.

Learn More About Debt Solutions for Having Government Debts Forgiven

What Are the Main Steps in a Corporate Bankruptcy?

The following is a very basic overview of the key steps for business owners who want to file a business bankruptcy. It’s important to remember that a personal bankruptcy filing will generally not have the same steps involved:

1. Meet with a Licensed Insolvency Trustee

To file a corporate (or personal) bankruptcy you will first need to meet with a Licensed Insolvency Trustee to discuss and evaluate your situation. Generally, this first meeting will be to understand:

• The average revenue and profits of the business
• Who the business owes money to, and how much is owed
  • Whether any personal guarantees have been signed by directors or stakeholders
• Who the directors, officers and other stakeholders of the company are

The Licensed Insolvency Trustee will explain the general process of business bankruptcy to you and ensure that you fully understand the requirements.

2. Sign the Corporate Bankruptcy Documents

If a decision has been made to proceed with a business bankruptcy, the Licensed Insolvency Trustee will prepare official bankruptcy documents for you to sign.

Once you have read and signed all the official business bankruptcy documents the bankruptcy will be registered and your creditors will no longer be able to pursue you for debt payments or continue to attempt collection actions.

3. Complete the Corporate Bankruptcy Duties Required

 Some obligations may be required of the business owner. Some of these duties include:

• Attending a meeting of your creditors
  • Your Licensed Insolvency Trustee will hold a meeting of your creditors within three weeks of the date of the business bankruptcy
  • This meeting gives opportunity for claims of creditors to be reviewed, and for creditors to vote on some decisions that may need to be made
• Providing information to/help the Licensed Insolvency Trustee
  • You may need to provide the Licensed Insolvency Trustee general information about, or assistance with any assets that may be sold under the bankruptcy, or information about the company’s creditors

Once the administration of the business bankruptcy has been completed and there are no further duties required of the Licensed Insolvency Trustee, the Trustee will then apply to the court to be discharged (released), this essentially closes the bankruptcy file and there is nothing else to be done on the part of the business owner or the Trustee.

We understand that the decision to wind down a business that is struggling financially can be difficult and emotional. Connect with a local Licensed Insolvency Trustee to discuss your situation, get more information about how to manage business debts, and evaluate all possible debt solutions available to you.

The post Business Bankruptcy in BC appeared first on Sands & Associates.

Read on to learn more about how Division 1 Proposals can help to save a business. 

What is a Division 1 Proposal?

Debt settlement proposals for businesses are officially called Division 1 Proposals, which are an effective and flexible tool that can be used to eliminate business debt and save your business. 

A Division 1 Proposal can only be filed through a Licensed Insolvency Trustee and is a binding agreement with the company’s creditors to restructure their debts owing, usually by reducing amounts and/or adjusting interest charges and timing of required payments. 

• A key theme of a Division 1 Proposal is that it must offer creditors more than what they would receive if the business were to file a bankruptcy. The percentage of debt forgiveness and amount of debt repayment required under a Proposal often depends directly on the company’s cashflow.

How Does a Division 1 Business Proposal Work for Businesses?

The Licensed Insolvency Trustee works with the owners of the company to draft a Proposal that presents a “win-win” situation for both the business and its creditors. Typically, the creditors are asked to give up rights to the monies they are owed, in exchange for an offer by the company to pay a percentage of the total debt (i.e. so many cents on the dollar) over time or sometimes as a lump sum payment.

• In a successful Proposal, the company wins because it survives, free from the burden of its debts.
• The creditors win because they retain a customer and get some of their money repaid, whereas in a bankruptcy they are likely to receive very little.

If you are a business owner having difficulty paying yourself a salary from your business or are falling behind in debt payments or tax obligations such as GST, employee source deductions, or income tax remittances, a Division 1 Proposal could be an option for your business.

How is a Division 1 Business Proposal Structured?

Division 1 Business Proposals are normally structured as a payment plan over a set period of time, or sometimes as a one-time lump sum payment, however, Proposals can be flexible and as creative as needed – no one size fits all! Since one of the few requirements is that the business’ Proposal must offer more to creditors than a bankruptcy, this allows for a wide range of Proposal terms to be considered.

As a Proposal is a transparent, legally-supervised process, there may be other circumstances where a Proposal can make sense, beyond solely helping a business continue as a going concern. For example:

• A Proposal could be used to wind down a company with the business owner in control, or to conclude non-profitable arms of a business.
• A Proposal could also be used to sell non-performing assets in an asset-rich, cash-flow poor scenario.

Before eroding your personal assets or net worth to finance your company obligations, talk with a local Licensed Insolvency Trustee confidentially at no cost to discuss your situation and business debt solutions.

What Does a Licensed Insolvency Trustee Know about Saving a Business?

Many Licensed Insolvency Trustees are also designated accountants (CA/CGA/CMA), Management Consultants (CMC), and Chartered Insolvency and Restructuring Professionals (CIRP) with years of professional experience assisting businesses in financial difficulty.

Does it Cost Money to Talk to a Licensed Insolvency Trustee? 

A Licensed Insolvency Trustee can offer a fresh perspective, experience, and a full toolbox of options to solve your business’ debt challenges. Confidential initial consultations are offered at no cost or obligation.

What Would be Discussed in the Initial Meeting? 

The first goal when speaking with a Licensed Insolvency Trustee is often to determine if the business is worth saving. 

• In assessing the viability of a business, together we’ll review the operations of the company, its financial statements and its ability to generate cash flow.
  • The amount of cash-flow a company can generate, and the value of its assets is a key factor in determining the options business owners have.
• In order to provide you as much assistance as possible, we suggest that you prepare a list of your business creditors and most recent company financial statements for your initial consultation.

When Should a Business File a Division 1 Proposal?

Generally, a company might consider filing a Proposal when it becomes difficult to pay its trade accounts, payroll or other bills. The sooner the business’ financial standing can be professionally assessed, the greater its chances of survival.

Some common business owner reactions to a shortage of business funds are to:

• Apply for more credit.
• Inject personal equity (cash or assets) to fund or support the business.
• Make the mistake of delaying payment to Canada Revenue Agency (“CRA”) for GST or employee source deductions.

Rather than solving the debt problem on a long-term basis, all three of these actions tend to increase the business owner’s personal liability associated with the company.  

Learn More About Business Debt Mistakes to Avoid

What Creditors Should Every Business Owner be Aware of?

Business owners should be aware of all the company’s creditors, including those that give rise to director liability and/or personal liability. Common examples are:

• GST/source deduction debts to Canada Revenue Agency.
• Personal guarantees, whether to a bank, credit card, landlord, or trade creditor.
• Wages owed to employees.

When Would a Business Not be Worth Saving? 

Usually, a business is not worth saving through restructuring if the company is suffering continual losses and there are no apparent solutions to return it to profitability. In this situation, a voluntary business bankruptcy may be an option to write-off the business debts. 

Key Steps in a Division 1 Business Proposal

1. Notice of Intention to Make a Proposal

If a company fears that a creditor is going to take some action to shut the company down, such as obtaining a judgment or seizing assets, the company can file a Notice of Intention to Make a Proposal with the assistance of a Licensed Insolvency Trustee.

• The Notice of Intention to Make a Proposal is a legal document and upon its filing a “Stay of Proceedings” is started.
  • A Stay of Proceedings is essentially a “timeout” and protects the company by preventing creditors from taking any further collection action against your company.

2. File a Proposal

The company works with a Licensed Insolvency Trustee to formulate a Proposal. Once the Proposal is finalized it will be sent to your creditors by the Licensed Insolvency Trustee so they can consider the offer and vote in favour of or against the Proposal.

3. Meeting of Creditors to Consider the Proposal

Creditors vote on the Proposal by mail or in person at a meeting of creditors, which is held approximately three weeks after the initial Proposal is officially filed.

• The Licensed Insolvency Trustee must file a report to the creditors about the affairs of the company and causes of the company’s financial difficulties.
• The Licensed Insolvency Trustee must also present to the creditors his or her estimate comparing how much money the creditors would receive under both the Proposal and a bankruptcy. (Remember, the Proposal must provide creditors with more money than a bankruptcy.)

If the Proposal is accepted by the creditors and subsequently approved by the Court then all unsecured and secured creditors to whom the Proposal was made are legally bound by the terms of the Proposal – this includes any creditors who did not vote in favour of accepting the Proposal.

• For a Division 1 Proposal to succeed, a majority in number of creditors, and two-thirds in value of debt, must vote to accept the Proposal.
• In the event that the Proposal does not receive the required votes to pass the Proposal then the company is entered into bankruptcy, effective the date of the creditors’ meeting.

4. Complete Proposal

Once accepted, all creditors and the business must adhere to and complete the terms of the Proposal. The business has now achieved a ‘second chance’ at success. 

Still not sure if a Division 1 Proposal is the right solution for your business? Talk to a Licensed Insolvency Trustee today to explore your options.

The post Division 1 Proposals for Business Debt appeared first on Sands & Associates.

Canada’s Number One Alternative to Bankruptcy: A Consumer Proposal

In Canada consumers have two legal debt solutions available to them – personal bankruptcy, and a special type of debt consolidation called a Consumer Proposal.

A Consumer Proposal can offer many benefits in dealing with your debt and providing debt relief, allowing you to consolidate and cut your debt without having to file for bankruptcy. This unique option is only available with the help of a Licensed Insolvency Trustee.

How a Consumer Proposal Consolidates and Cuts Debt – Without Bankruptcy

A Consumer Proposal will combine your debts and you’ll work with a Licensed Insolvency Trustee who will prepare and coordinate your offer to repay your creditors the portion of your debt that you can afford over a period of up to five years, in full settlement of your debt.

• You may be able to cut your debt by up to 50-80%, and you can manage virtually all types of debt through a Consumer Proposal, from credit cards to Canada Revenue Agency debt, to student loans and more.
  • Consumer Proposals are the only way to reduce government debts, besides declaring bankruptcy.
• A Consumer Proposal is not a loan, and your credit history is not a qualifying factor.
• No interest will be charged to you on the debt you are repaying.

Your Licensed Insolvency Trustee will work with you as you decide how much you can afford to offer your creditors, taking your situation, needs and goals into consideration. When you’re ready, your Proposal will be sent to your creditors so they can consider your offer, and after your Proposal is accepted, your creditors will receive their payments through your Licensed Insolvency Trustee.

Making a Consumer Proposal – Step by Step

• If a simple majority (i.e. 50% or more) of your creditors (by dollar value) accept your Proposal, it is legally binding on all creditors, even those who didn’t respond or vote in favour of it.
• Filing a Consumer Proposal means your Licensed Insolvency Trustee steps between you and your creditors, so your creditors are no longer allowed to ask you for payments or try to collect money from you.
• Licensed Insolvency Trustee’s fees are set by government tariff and paid from the funds received by creditors. There is no additional cost to you the individual, besides what you offer your creditors in the Consumer Proposal.

Other Alternatives to Personal Bankruptcy

In addition to making a Consumer Proposal, you might consider one of these other options mentioned below to help you manage your debt without bankruptcy.

Whereas a Consumer Proposal only requires you to repay a portion of your debt to settle the balances in full, with no interest or added fees, other common types of debt consolidation do not reduce your balance, and you can expect to pay interest and/or added professional fees.

How Interest Rates Affect Your Debt and Payments

Pay Back Your Debt Through a Consolidation Loan

A lender may be willing to give you a consolidation loan to help you streamline your debt repayment. Typically, the new lender will pay off the individual creditors and you will then owe the new lender for this combined balance, plus interest charged by the new lender.

• The intended goal of a consolidation loan is normally for you to reduce the interest rate at which you repay your debt.
  • Often consolidation loans can reduce interest payments from 19-29% annually on a typical credit card down to approximately 10-15% annually on a consolidation loan.
• The new lender may require you to pledge an asset, such as a vehicle, as collateral for the consolidation loan, and/or require you to find a co-signer to further guarantee repayment of your loan.
  • It can be difficult to qualify for debt consolidation financing if:
    • You do not have an asset to pledge
    • You do not have a co-signer who will agree to be sign on with you
    • Your income is low, or inconsistent
    • Your credit rating isn’t high

Repay Your Debt Using a Credit Counselling Debt Management Plan

Private and non-profit credit counsellors may help you arrange a consolidated debt settlement with your eligible creditors, sometimes called a ‘debt management plan’. The credit counsellor will attempt to negotiate individually with each creditor to allow you to repay all your debt over a period of up to five years, sometimes without interest.

When considering credit counselling debt management plans, it’s important to be aware of the following:

• Not all creditors will work with credit counsellors, most notably Canadian and Provincial government organizations. If you owe Canada Revenue Agency for example, you will need to deal with this creditor and debt outside your credit counselling debt management plan (and any other who do not agree to your plan).
• There is no legal protection with this type of ‘informal’ debt management plan, so creditors can still pursue you for payments, and if you don’t make your payments on time the plan may be cancelled.
• All credit counsellors charge some type of fee for their services or programs, which you will pay on top of repaying your debts to your creditors.
  • You may find credit counselling difficult if:
    • You cannot afford to repay all your debts in full, plus the service fees
    • Some of your creditors will not agree to the plan and will continue to pursue you for payment
    • You have government debts

Questions to Ask Your Credit Counsellor About Their Services and Plans

Get Advice About Your Debt and Debt Options

If you’re considering your options to manage your debt, the best thing to do is talk with a Licensed Insolvency Trustee local to your area. In just 30 minutes we can help you understand your situation and all the options you have available to you.

Once you have clarity about all of the benefits of each debt resolution option you can confidently make an informed decision and move forward with the solution that best fits your needs.

Sands & Associates’ caring debt help experts are here for you, with support and solutions – and without judgment.

The post Alternatives to Personal Bankruptcy appeared first on Sands & Associates.

Tips to Manage Rising Consumer Costs 

Increases in essential costs of living aren’t a new foe for British Columbians, with day-to-day expenses from rent to groceries to gas having noticeably risen in recent years. Although most people can’t substantially cut their living expenses, there are some things you can try to gain some financial breathing room.

Prioritize Your Household Budget

A monthly personal budget that’s balanced to your specific situation and goals is a cornerstone of having control of your finances. Whether you already have a budget, or you are putting one together for the first time, create a budget to plan:

• Anticipated regular income
  • If your income varies use your lower earnings as an estimate, and don’t bank on irregular cash injections such as tax refunds.
• Fixed expenses such as rent and vehicle payments
• Categorizing and managing monthly variable expenses like groceries and personal spending
  • Be sure to budget a monthly allowance to cover irregular expenses, such as annual insurance renewals.

Once your new budget is decided, track your actual income and spending to see whether adjustments should be made to get your budget plans and financial realities in-line. Also pay extra attention to your personal spending habits, and related emotional drivers. For example, you may want to unsubscribe from retailer emails that compel you to spend more simply because there’s a sale you don’t want to miss out on.

Book Your Free Consultation

Reconsider Your Non-Essential Costs 

Beyond your grocery cart, scrutinize expenses you have control over, and reconsider whether you will continue spending money on non-essentials you may decide no longer make the cut. Costs to evaluate might include:

• Tiers for services such as TV and digital streaming, shopping and app subscriptions
• Banking costs, including credit card fees, interest rates, and balance protection insurances
  • There are many options for free banking, and no-fee credit cards.
  • Depending on your circumstances, it may not be worth having balance protection insurance, as premiums are based on your balance and in many cases the coverage does little to reduce your balance.

Debunking Common Consumer Debt Myths – Learn More

It’s important to remember that budgeting is intended to be a tool used to your benefit, not a punishment – and deciding on your spending priorities, needs and wants, are important components that everyone should consider, regardless of income levels.

BC Licensed Insolvency Trustee and President of Sands & Associates Blair Mantin shares personal debt tips and insights with CTV Morning Live.

Book Your Free Consultation

Tips for Future and Emergency Financial Planning 

After weathering a global pandemic and aggressive inflation, many consumers are feeling weary about what they can do to future-plan. While we can’t control all the external influences, taking charge of what is within your power can help you mitigate unforeseen challenges that may come.

Keep Your Income Taxes Filed (and Paid) Up-To-Date

Even if you don’t expect to owe, it’s in your best interest to keep paperwork and personal tax filings up to date (and clear any balance payable as soon as possible). For example:

• Many government credits and benefits rely on Canada Revenue Agency (CRA) information
• Your Notice of Assessment from CRA is often the best way to easily prove your income for housing applications

Learn About Tax and Canada Revenue Agency Debt Forgiveness

Focus on Becoming Debt-Free

Paying down your personal debt is one of the most positive ways to improve your finances – and taking debt-stress out of the equation is doubly good for your wellbeing. Depending on your situation, you may consider strategies such as:

• Restructuring your debt, such as with a balance transfer or debt consolidation (consumers do also have options to consolidate without borrowing)
• If you’re stuck just making minimum payments on your debts each month, carefully review your account statements to understand if you are truly making progress. Sometimes as little as $10 from a $200 monthly payment actually goes to reduce the principal, the rest is eaten up by interest or fees
  • Making just minimum payments on even a $5,000 credit card debt can be a decades-long repayment plan.
• If you’re making only (or not much more than) minimum monthly payments on your debt and/or it will take you more than five years to pay off your non-mortgage debts, understand these are indicators that your personal debt situation is risky, and you may benefit from getting information and support from a Licensed Insolvency Trustee.

Do the “Rule of 60” Math

• Divide your total non-mortgage debts by 60 – does the number look like a monthly payment you could afford in order to pay your debts off in five years? If that five-year figure barely fits your budget (or doesn’t fit at all) then you can likely assume you will need a solution that will cut your debt.

Take 30 minutes to talk with a local Licensed Insolvency Trustee about your options and resources to help you get your debt paid off. Many consumers are surprised to learn about the solutions available to them, like a Consumer Proposal that both consolidates and reduces your debts, and it’s free to have a confidential consultation and get advice from a qualified professional.

Know that you are not alone – BC Licensed Insolvency Trustees are here to offer you resources and support. You can live free from debt and its overwhelming stress. Connect with a caring, non-judgmental Sands & Associates debt expert today to talk about your debt-free plan.

Book Your Free Consultation

The post How to Manage Personal Debt and Finances Through Economic Instability appeared first on Sands & Associates.

• Every day we provide debt advice and guidance to consumers with a range of needs, and a common thread is that “knowing is not owing” – people need to have the facts so they can make informed decisions about their unique situation.
• Even if you don’t consider your debt a problem, it’s important to understand your rights and responsibilities – owing money is stressful, there are many ins and outs when it comes to debt, and unfortunately what you don’t know can hurt you financially.

Read on as we break down 10 of the most common consumer debt myths and misconceptions. 

Myths About Debt You Owe

Myth: Creditors Can Always Sue You Over a Debt Owed

Fact: Canadian law sets out a statute of limitations on debt.

In BC, the Limitations Act caps the period of time a creditor has to take legal action against you (i.e. sue you) for a debt you owe. What this essentially means is that while the debt does remain payable, if it has been two years or more since you made a payment or acknowledged the debt in writing, then your creditor may not have further recourse to collect the debt from you, beyond putting notations on your credit history and sending you mail.

Myth: Co-signing Debt Makes You Responsible for Half

Fact: By co-signing a debt, you become equally responsible for repaying 100% of the unpaid balance to the lender.

When you co-sign a debt, if the original borrower doesn’t pay back the debt the lender can demand that anyone listed in the loan or agreement (i.e. the co-signer/co-borrower) repay the entire balance – not half. This type of liability is known as ‘joint and several’.

• Read your applications and lending agreements carefully to understand the terms of borrowing and who is responsible for what – these can change depending on the lender and whether they are considering an application/account for “additional cardholders” or “co-borrowers/co-applicants.” Always check the fine print!

Myth: Marrying Someone Makes You Responsible for Paying Their Debt

Fact: One spouse is not responsible for repaying the debts of the other spouse solely by virtue of marriage or cohabitation.

You are responsible for repaying debts you’ve co-signed for or taken on jointly (as discussed above), or debts triggered as marital debts by the act of separation under the Family Law Act. You cannot be suddenly made liable for a debt owed solely by your spouse just because you got married. Essentially, there is no way to “marry into” a debt.

Am I Responsible for my Spouse’s Debts? Learn More

Myth: You Should Always Buy Insurance Protection

Fact: Credit card balance protection insurance often isn’t “worth” its cost.

Some banks are quick to sell and aggressively promote various insurance products, and while some are worthwhile considerations, like life insurance for a young family, others provide little value in most circumstances – one of these Licensed Insolvency Trustees often caution against is ‘balance protection insurance’.

• Even if you don’t carry a balance each month you pay fees into this product, which can be as high as 1% of the purchases on the card. Over the course of one year, this could take a 20% credit card interest rate to more than 32%.
• The other issue is that in most instances where you’d expect the insurance to help, it does very little. For example, if you lose your job, it may cover the minimum payments for the period you are unemployed – but very little of these payments will reduce the balance you owe on the card.

Myth: Incorporating Your Business Fully Protects Owners Personally

Fact: While corporations may protect owners from their debts to some degree, there is still a personal liability created for certain debts that cannot be avoided.

This personal liability can include debts such as:

• Wages; GST and payroll remittances
• Debts you have signed a personal guarantee for

Many business owners are aware that essentially any debts a sole proprietor or partnership business accumulate are payable by their owners, since there is no distinction between business and owner, but unfortunately, some business owners have a false sense of security when it comes to protecting their personal assets and liabilities if they incorporate their business.

Myths About Managing Debt

Myth: There’s No Forgiveness or Renegotiation Option for Government Debts

Fact: You can have government debts reduced and cleared by filing a Consumer Proposal (or forgiven through bankruptcy).

A Consumer Proposal is a legal debt consolidation remedy that can be used to stop all interest, reduce amounts owing by up to 50-80%, and work out a payment plan for what you can afford to repay. Government debts like taxes, business GST, student loans, benefit overpayments and more – plus debts like credit cards, payday loans, lines of credit, etc. can all be dealt with using this powerful tool, which will also halt a wage seizure or bank account freeze.

Myth: Minimum Payments on Credit Cards are Enough

Fact: Making just minimum monthly payments may keep your account in good standing, but it’s not enough to get debt paid off without incurring considerable interest costs.

Many individuals fall into a trap of just making the minimum payments on their credit cards and assuming that they are making progress towards getting their debt paid off. The reality is that at 20% interest, making minimum monthly payments on a $10,000 debt could take more than 25 years to clear and will cost more than $12,000 in additional – and avoidable –  interest charges.

• Banks must disclose exactly how long it will take to pay off a debt if you make only the minimum payments, so you can see this breakdown on your own bill.
• If you can only afford minimum payments each month, you very likely have a debt problem and should talk with a Licensed Insolvency Trustee as soon as possible.

Compare Your Debt Options

Enter your total amount of debt (excluding mortgage and car loan) and we’ll show you a list of options.

Myth: Your Credit Score is a Reliable Indicator of ‘Financial Health’

Fact: A credit score is essentially a numeric rating used by lenders to determine whether they will loan money, and at what cost.

Part of the problem with taking a ‘good’ credit score as an indication of financial and debt health is that habits that drive a high rating are often at odds with habits that lead to financial success. Since a credit rating mostly measures whether you pay your bills on time it considers nothing about whether those bills are too high or if you have any savings or assets at all.

Myth: Debt Consolidation Must be Done by Borrowing

Fact: You can consolidate your debt without borrowing or interest by making a Consumer Proposal.

Many people considering how to manage their debts believe their options amount to consolidation loans, credit counselling programs, or bankruptcy – but these are not your only options!

• Consumer Proposals are an effective debt solution that allows you to consolidate your debts, repaying what you can afford, with the unpaid balance being forgiven by your creditors.
• This consolidation option requires no borrowing and interest charges (such as a consolidation loan), nor require you to pay added professional fees (such as credit counselling).

Myth: Canada has Government-Sponsored Debt Relief Programs

Fact: The Canadian government does not offer grants or programs for personal debt repayment other than the options provided by a Licensed Insolvency Trustee.

The Canadian government does not have government grants or debt programs available, but it does regulate legitimate legal debt relief options that are available through Canada’s designated debt help professionals – Licensed Insolvency Trustees – namely Consumer Proposals (to consolidate and cut debt) and bankruptcy (to get debt forgiveness), as well as some student loan relief administered through Canada Student Loans.

Get Information and Advice About Your Debt and Debt Options 

The best and safest way to get accurate information about debt, and your debt options and resources, is to reach out directly to a Licensed Insolvency Trustee local to your province and ask to have a free consultation – you don’t need a referral to talk confidentially with us.

• Sands & Associates is available for help seven days a week and we have options for in-person appointments, as well as full support over the phone and online videos.
• In about 30 minutes you should have a clear understanding of your situation and next steps in the debt solution you decide best fits your needs. Knowing is not owing! 

Get solutions, support, and a debt-free plan that’s right for you.

The post Debunking Common Consumer Debt Myths appeared first on Sands & Associates.

• Virtually all your debts can be included in a Consumer Proposal, everything from credit cards to payday loans, outstanding taxes to student loans and more.
• Typically creditors will agree to accept repayment of 20-50% of your balance to consider the debt fully settled, and interest charges are automatically frozen.
• You’ll have up to five years to pay off the agreed amount of debt, usually via monthly payments.
  • For example, if you owe debts totalling $25,000 you might offer to pay $210 a month for three years (36 months), repaying a total of around $7,500 to cut your debt by 70%. The balance of the debt is legally eliminated at the end of the Proposal.

Filing a Consumer Proposal can be a great way to streamline your debt repayment, and despite being a legal solution, the process is generally straightforward. Read on to learn details around how a Consumer Proposal works, and some of the ways a Consumer Proposal does and doesn’t impact you.

Key Ways a Consumer Proposal Will Affect You 

A Consumer Proposal Provides Protection from Creditors

When your Consumer Proposal is filed it acts as a shield to protect you and your assets from your creditors. This Consumer Proposal effect is an especially welcome relief to anyone worried about overdue payments or outstanding accounts since a Consumer Proposal will:

• Stop creditors from contacting you for money, and stop all collection activities that may have been happening.
• Halt legal action creditors may have been taking against you.
• Immediately remove wage garnishments or account freezes (even from the government).

A Consumer Proposal Restructures Your Debt Payments

Because a Consumer Proposal will consolidate (and cut) virtually all your debts, rather than juggling multiple accounts and payments, you’ll have one simple (usually monthly) payment to make to your Licensed Insolvency Trustee.

• Since your debt may be cut by up to 50-80% with no interest charges or added fees, Consumer Proposals usually save people paying off debt a considerable amount of money and time.
• Most people opt to handle payments for ‘secured debts’ that are in good standing outside their Consumer Proposal, so normally a Consumer Proposal won’t include secured debt agreements you’ve decided to continue paying, such as your mortgage or vehicle financing.
  • Many clients find themselves in a much better position to continue to make payments on their home mortgage or car loan after they have significantly reduced their other consumer debts through a Consumer Proposal.

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A Consumer Proposal Temporarily Affects Your Credit Rating

Like other types of debt consolidation or settlement, filing a Consumer Proposal does temporarily reduce your credit score. Here’s what you should know:

• Your Consumer Proposal will be noted on your credit history for three years after the debts included in your Proposal are paid off – or – for six years from the date your Proposal started, whichever is soonest. This is often considerably less time than it would take you to pay off your debt on your own.
• You can seek new credit any time, even while your Proposal is active, and most people are able to get basic things like a credit card shortly after filing their Proposal.
  • Secured or prepaid cards can also be good alternatives to have the convenience of a credit card but enjoy the break from debt accounts.
    • Keep in mind that a secured card, rather than a prepaid card, will normally provide updates to credit bureaus to help you rebuild your credit after filing the Consumer Proposal.
  • If your mortgage comes up for renewal during your Consumer Proposal this shouldn’t be an issue, provided it is paid up to date.

Many people worry about whether consolidating their debt with a Consumer Proposal will have a long-term (or even permanent) impact on their credit score, but the reality is that the effect is generally far less severe than they fear, and for most people the benefits far outweigh the temporary inconvenience.

• It’s also important to know that despite a ‘good’ credit score, many people dealing with a debt problem can’t get help from their bank to deal with their debt, notwithstanding that they may have a high credit score and are not missing payments.

Key Ways a Consumer Proposal Will Not Affect You 

A Consumer Proposal Doesn’t Make Your Spouse Pay Your Debt

Filing a Consumer Proposal should not affect your spouse in any way unless they have co-signed or guaranteed debt together with you.

• Having a spouse or common-law partner does not on its own trigger a shared liability with the other spouse/partner, nor does it give your creditors recourse to ask them for payments, nor mean they must do a Consumer Proposal too.
• Unless you’ve given your creditor means to collect from both of you by taking on joint debt or triggered a division of “family debts” by separating or divorcing, your spouse isn’t responsible for repaying your debt.
• Your financial responsibilities are in fact so separate that where there is no co-signer, guarantor, or co-cardholder, it is possible for one spouse to file a Consumer Proposal without the other one being aware, as typically only creditors are notified of your Proposal.

Book Your Free Consultation

A Consumer Proposal Doesn’t Affect Your Employment

For most people a Consumer Proposal in no way affects their job and you can change jobs or switch careers at any point.

• Overall, the Consumer Proposal process is very private and in normal circumstances your employer is not notified about your Proposal unless your wages are being seized – this is because your Licensed Insolvency Trustee will contact your payroll department to halt the garnishment when your Proposal starts.
• If you still need reassurance that a Consumer Proposal won’t impact your employment, know that the federal Bankruptcy and Insolvency Act, which governs Consumer Proposals, specifically states “No employer shall dismiss, suspend, lay off or otherwise discipline a consumer debtor on the sole ground that a consumer proposal has been filed in respect of that consumer debtor.” (S. 66.36)
• Also, for business owners – you can be self-employed during a Consumer Proposal, including being the director of a corporation.

A Consumer Proposal Doesn’t Take Away Your Tax Refunds

A Consumer Proposal doesn’t impact how you file your tax returns or cause you to ‘lose’ your tax refund or other tax credits you may be eligible for, even if you included a prior income tax (and/or business GST) balance owing to Canada Revenue Agency in your Consumer Proposal.

• While your Consumer Proposal is active you’ll need to ensure your tax returns are filed up to date and that any balances owing from these new returns are paid.
• If you regularly owe money to Canada Revenue Agency a clause may be added to your Proposal that allows you to include the exact amount you owe for income taxes up to the date you start your Consumer Proposal, even if that tax return isn’t yet due.

Book Your Free Consultation

A Consumer Proposal Doesn’t Prevent Immigration Sponsorship 

If you have a Consumer Proposal you can still apply to sponsor someone to immigrate to Canada, bearing in mind that you should always refer to the Government of Canada for the latest rules and guidelines. This is an important distinction between Consumer Proposals and bankruptcy, as a person who has not yet been discharged from bankruptcy will need to wait until their bankruptcy is finished before making an application to sponsor immigration to Canada.

• Neither a Consumer Proposal nor bankruptcy prevent you from applying for citizenship in Canada, nor from leaving the country (for vacation or permanent relocation) – just be sure to keep your Trustee informed as to your address if you move before your Proposal or bankruptcy are complete.

Is a Consumer Proposal a Good Solution for Me? 

For people who owe debt totalling less than $250,000 (excluding their mortgage), and want to make their debt payments more manageable, a Consumer Proposal is one of the best debt consolidation options available.

If you’ve been wondering about a Consumer Proposal but worried about navigating any aspects of the process, be sure to talk with a Licensed Insolvency Trustee about your concerns. It’s vital that you have all the facts about how to deal with your debt and the opportunity to explore all your options together with a qualified professional.

• A Consumer Proposal can only be filed by working with a Licensed Insolvency Trustee. We are Canada’s only official debt help professionals and Licensed Insolvency Trustees alone are qualified and endorsed to help you make a Consumer Proposal.
• Consumer Proposals are a unique debt solution – they are not the same as bankruptcy, nor are they the same as credit counselling or other types of informal debt settlement plans.
• If you’ve been advised against a Consumer Proposal by anyone besides a Licensed Insolvency Trustee, it is recommended you contact a Licensed Insolvency Trustee for a second opinion.

You can connect directly with a Licensed Insolvency Trustee local to your province and ask to have a free, confidential consultation to talk about your situation and options.

• Sands & Associates serves all of BC and our Licensed Insolvency Trustees and Insolvency Estate Managers are available to talk with you seven days a week. In just half an hour we can help you better understand your situation and choose the debt-free plan that’s right for you.
• You’re welcome to talk with us confidentially over the phone, by online video, or in person at a local office near you – whatever you find most comfortable and convenient.

You are not alone in finding a way to move forward – we’re here for you with support and solutions.

Talk with a local Sands & Associates Licensed Insolvency Trustee today and find your best debt solution.

Book Your Free Consultation

The post How Does a Consumer Proposal Affect You? appeared first on Sands & Associates.

Read on to learn more about who we are, what makes Sands & Associates different from other debt help professionals, and some of our proudest achievements over the past 35 years.

Sands & Associates – Founded in 1990

Sands & Associates was founded in BC’s lower mainland in 1990 by Bankruptcy Trustee Earl Sands and later expanded to include six offices throughout the greater Vancouver area. In the coming years Sands & Associates would grow to an extensive network of local offices across the province, recognized as BC’s best, award-winning Licensed Insolvency Trustees.

BC-Wide Debt Help Services

Unlike many large national debt relief organizations, Sands & Associates focuses solely on debt help services for consumers and small business owners. We are the largest firm in BC to take this specialized approach, offering our services and advice with respect and understanding – we know that debt-stress can deeply impact people, and a debt problem can happen to anyone at any time.

• Sands & Associates is proud to be able to help people complete their debt-free journey, from consultation to debt-free, whether from the comfort of their own home, or in-person at a local Sands & Associates office near them.
• By embracing the connection technologies available we are helping to ensure that debt relief services are accessible to everyone, removing in-office service barriers and constraints.

What to Expect

Sands & Associates Clients

Our team values the trust people place in us when they look to our professionals for support and solutions to take control of their finances and move towards brighter, debt-free days.

Many people worry there are no solutions to their debt problem, and we are exceptionally grateful for our clients who have chosen to come forward over the years and share their words of reassurance and encouragement to others who may be facing a similar situation, and those who share their deeply personal stories about how they found a financial fresh start.

Read Client Reviews

Whether you are seeking information about a debt resource, or exploring specific debt solutions, we aim to provide a “five star” experience from start to finish, treating everyone with dignity and respect.

The post We Help with Debt – 35 Years and Counting appeared first on Sands & Associates.

Having polled over 2,100 people from around the province who recently made an insolvency filing, the 2024 BC Consumer Debt Study offers unique insights into consumer debt issues across the province, exposing the realities of dealing with a personal debt problem and the serious impacts of debt issues on consumers’ health.

Sands & Associates President and Licensed Insolvency Trustee Blair Mantin joined CTV News to share key findings from the 2024 BC Consumer Debt Study.

Watch the clips here and learn more below:

• The 2024 BC Consumer Debt Study’s largest cohort (36%) said they had $25,000-$49,999 of debt (excluding vehicle loans/mortgages) when they started their debt relief process.
• Over half of individuals polled (56%) said credit card debt was the main type of debt they had – 4.5 times more than the next leading type of debt.
• Payday (or instalment) loans were the second-most reported (12%) type of problem debt for consumers, as well as tax debt (12%).
  • Payday loan usage has almost doubled as the main type of problem debt for BC Consumer Debt Study participants since 2020’s study (6.3% of respondents attributed their main type of debt to payday loans in the 2020 BC Consumer Debt Study).
• 72% of people surveyed said overwhelming stress was how they knew their debts were becoming a problem.

Common Issues Driving Consumer Debt in BC

Four of the five top-reported causes of problem debt for consumers polled in the 2024 BC Consumer Debt Study may be related to issues outside the individual’s immediate control:

• Almost 1 in 4 people surveyed said the direct main cause of their debt was using credit for essential costs of living income could not cover (24%).
• Illness, injury or health-related problems (11%), marital or relationship breakdown (7%) and job-related issues (7%) were also direct main causes of debt identified by survey participants.
• 27% of British Columbians polled in the study attributed the direct main cause of their debt to overextended credit due to general financial mismanagement.

Debt Problem Warning Signs

An emotional cue was the top warning sign of a debt problem for most people:

• Over 7 in 10 individuals surveyed (72%) said overwhelming stress was how they knew their debts were becoming a problem.
• Other top signs of a debt problem reported by consumers included: Only making minimum payments (58%) and seeing debt balances remain almost the same every month, despite making payments (55%).

4 Budget Issues That Point to a Debt Problem

Impacts of Problem Debt on Consumers

The BC Consumer Debt Study series reveals the devastating effects that money problems can cause consumers, with impacts experienced far beyond financial transactions. The effects of dealing with problem debt as reported by individuals polled included:

• Almost 4 in 5 people (79%) said their mental health suffered because of being in debt, and 3 in 5 individuals (60%) said their self-esteem suffered by being in debt.
• Over 4 in 5 people (84%) said they had a constant worry about debt.
• 78% had anxiety, 69% feelings of helplessness or hopelessness, and 61% had depression because of debt stress.
• Close to half (48%) of respondents said being in debt caused their physical health to suffer.
• Roughly 1 in 7 individuals said they experienced suicidal ideation because of their debt-stress.

Consumers Delaying Seeking Debt Help

Almost 4 in 5 people (79%) said their mental health suffered because of being in debt and despite this, only 6% of individuals said they sought help as soon as they knew they had a problem.

• 41% of consumers polled in the 2024 BC Consumer Debt Study said they waited more than two years before seeking help – a 51% increase since the 2018 BC Consumer Debt Study.
• Most survey respondents (62%) say they waited to seek professional debt help because they wanted to manage debt on their own.
• More than half (54% and 51% respectively) said they waited because they felt ashamed they couldn’t handle the debts they incurred or were embarrassed to ask for help.

Misinformation remains a concerning barrier for individuals dealing with overwhelming debt:

• More than 1 in 4 consumers surveyed (27%) said they delayed seeking help for their debts because they didn’t know where to seek help.
• Nearly a third of individuals polled (32%) said they waited to seek professional debt help because they thought there was no solution to their situation. 

Learn About Debts You Can Include in a Consumer Proposal 

Solving Debt Problems

• Roughly 1 in 3 people surveyed (34%) tried to deal with their debts by applying to extend credit limits on existing debts.
• 26% of consumers said they applied for consolidation financing, while 25% used payday or instalment loans, and 5% asked family or friends to co-sign a consolidation loan (5.2%).
  • 33% of people said they borrowed from family or friends to make debt payments.

Individuals who recently used a legal debt relief process were surveyed for the 2024 BC Consumer Debt Study, with 85% of respondents who ultimately reorganized their debts using a Consumer Proposal, and 15% who sought debt forgiveness through Personal Bankruptcy.  The debt relief option of choice for consumers has changed remarkably in recent years, with Consumer Proposals now far outpacing bankruptcy.

• Over 90% of individuals polled in the 2024 BC Consumer Debt Study expressed satisfaction with their choice to file a Consumer Proposal or Personal Bankruptcy to deal with their debts.

Real Stories – Learn More from BC Consumer Sharing their Personal Stories

Where to Get Safe, Professional Debt Help

Blair Mantin, President of Sands & Associates, the firm of Licensed Insolvency Trustees who perform the debt study series, says that solving a debt problem independently can be nearly impossible for many people, and that unfortunately many consumers become overwhelmed and are unaware of the support available to them.

As Blair explains, BC residents are encouraged to seek support and solutions from a Licensed Insolvency Trustee at the onset of a debt problem, and consumers should know that:

• You can connect directly with a Licensed Insolvency Trustee local to your area to seek free, confidential debt advice and explore all your options for dealing with debt.
  • No referral or payment is necessary to have a free consultation, and there are no pre-qualifiers to meet.
• Consumers should be on guard against debt settlement agents and third-party referral sources that attempt to sell inferior or unregulated debt help services.
  • Licensed Insolvency Trustees are Canada’s only official debt help experts, fully qualified and endorsed to provide guidance on dealing with your debt, and a range of debt management services.
• You don’t need to be facing an extreme financial situation to seek information from a Licensed Insolvency Trustee – anyone can get free, confidential advice about their situation and options.

Sands & Associates believes that open conversations and non-judgmental support are key to removing barriers for people struggling with debt. If you are feeling worried or stressed about your debt, or want to explore debt management solutions and resources, connect directly with a Licensed Insolvency Trustee local to your area for a free confidential consultation.

Sands & Associates is BC’s largest firm of Licensed Insolvency Trustees focused exclusively on non-judgmental debt help for consumers and our full suite of services is available by phone, video, or in person at a local BC office near you.

The post New Debt Study Uncovers How Debt Problems Impact BC Consumers appeared first on Sands & Associates.

We understand it can feel difficult to take the first step of reaching out for professional advice with a personal debt issue and believe that our supportive, non-judgmental approach to providing debt help is a key component not only of our success, but the success of our clients. Everyone deserves the opportunity to get a financial fresh start, and to be treated with respect and dignity.

“Sands & Associates helped me navigate a way through my debt. I thought I had run out of options, but they offered me several. Sands & Associates relieved so much of my stress, and the financial counselling was extremely beneficial to my family and our budgeting plan.” – Skyla

“Sands & Associates made an incredibly difficult thing looming above my family’s financial future into something with hope and with a light at the end of the tunnel. Every team member made a tremendous amount of effort for my sake and cared enough to ensure a smooth, fast, and efficient transition to eventually having a debt-free life. …it made an incredible difference in our lives!” – Dylan

Debt-stress can be overwhelming and the sooner you confront a growing debt problem, the better. Without intervening action issues almost always get worse, and situations can escalate quickly.

Connect with Sands & Associates in person or from the comfort of home and get non-judgmental debt advice a debt-free plan that’s right for you – book your free, confidential consultation today. 

Consumer Debt Help – Advice & Services 

Most people never expect to find themselves in a position where they are struggling to pay off their debts, and few individuals are aware of their rights and remedies when it comes to dealing with debt. A debt problem can happen to anyone at any time, and the ideal time to address these issues is in the early stages. A Licensed Insolvency Trustee is your best ally to help you find a solution to clear debt and move forward.

Although there are a wide range of individuals offering debt help services to Canadians, Licensed Insolvency Trustees are Canada’s only official debt help providers and consumers can safely get qualified, free, impartial advice about their situation and explore all their options for managing debt, including debt consolidation and debt relief.

Connect with Sands & Associates’ award-winning Licensed Insolvency Trustees 

Solutions to Manage Personal Debt 

Many people mistakenly believe that when they are having difficulty managing their debt filing for personal bankruptcy is their only recourse – but you may in fact have several options that will help resolve your situation, including but not limited to:

• Consolidating and cutting your debt with a Consumer Proposal, a special type of legal consolidation that can reduce the debt you must repay by up to 50-80%, without any borrowing or interest charges.
• Working with a lender to refinance your debt through products such as a consolidation loan, mortgage or balance transfer.
• Repaying basic consumer debts through a credit counselling repayment plan.
• Prioritizing debt payments to focus on high-priority balances.
• Declaring bankruptcy to get up to 100% of your debt forgiven.

In some cases, people can solve their debt problem using self-directed resources or strategies that a Licensed Insolvency Trustee can help explore. Or, if you decide that a Consumer Proposal or bankruptcy are the best solution for you and your situation, your Licensed Insolvency Trustee will be there to support you through these processes.

Learn More About Comparing Debt Management Plans

Talking with a Licensed Insolvency Trustee

Anyone can talk with a Licensed Insolvency Trustee to get free, confidential debt advice, and your credit score and history are not qualifiers to getting debt help. A confidential consultation is an opportunity for you to start moving forward, and this conversation should address your concerns, goals – and solutions – to manage your debt.

• When you connect with a debt expert at Sands & Associates, we will take the time to understand your unique situation, and walk you through all your available solutions in clear, understandable terms, answering all of your questions so you can make fully informed decisions about your future.
• At the end of this conversation, you should have a clear outline of the next steps in the plan you choose, and many of our clients tell us that knowing that they could move forward, and how they would do so, lifted a burden from their shoulders.

Sands & Associates’ full suite of debt help services is available seven days a week, with options for in-person meetings, as well as telephone and video conferencing – whatever is most comfortable and convenient for you.

Get non-judgmental advice and debt solutions that work. Book your free, confidential consultation with Sands & Associates now.

The post Office Spotlight: Sands & Associates Revelstoke appeared first on Sands & Associates.

How Does Consumer Proposal Debt Consolidation Work? 

A Consumer Proposal is a legal debt solution that allows an individual to consolidate virtually all their debts into one repayment plan and cut the amount of debt that needs to be repaid to have all accounts settled in full. A Consumer Proposal is customized to meet the person’s specific situation and needs, and it’s not uncommon for total debts to be cut by as much as 50-80% or more.

Working with a Licensed Insolvency Trustee together you will determine the portion of your debt that you can afford to repay over a period of up to 60 months. Your debts will legally be frozen, and no interest will be charged as you make your Consumer Proposal payments, which are usually monthly. Once you’ve completed the terms of your offer the unpaid debt will be considered forgiven and can never again be legally attached to you.

• If your total debt is between $1,000 and $250,000 (not including your mortgage) and you are unable to immediately repay all your debts, a Consumer Proposal is one of the best ways to consolidate (and cut) your debt, getting you to debt-free in five years or less.

What are the Key “Pros” to Choosing a Consumer Proposal? 

Some of the pros to consolidating and cutting your debt with a Consumer Proposal can include:

• Your Proposal will be legally binding on all your creditors if the majority (by dollar value) agree to your offer. You can consolidate virtually all your debt, from credit cards to payday loans, lines of credit to overdrafts, government debts like student loans, outstanding taxes and GST and more.
  • You have the option to continue with ‘secured’ arrangements for financing such as your mortgage and/or car payments outside of your Consumer Proposal.
• No new interest is charged on your debt, your balances are frozen.
• Make a single, affordable monthly payment, which can make managing day-to-day finances much easier.
• Even if your financial situation improves, your payment terms will remain the same, although you may want to pay more on your Proposal to pay it off sooner.
• Your assets and income will be legally protected, and you’ll continue to receive income tax refunds and other tax credits as you normally would.
• Creditors will be prohibited from contacting you for payments and must halt all other collection actions, lawsuits and harassment. Even wage garnishments from Canada Revenue Agency must cease immediately after a Consumer Proposal is filed.
• You will have a clear debt-free date within the next five years, and you can pay off your Consumer Proposal early at any time, without penalty.

Lastly, some people may simply choose a Consumer Proposal because they can’t afford their debt payments anymore and they want to avoid filing for bankruptcy. In addition to the Consumer Proposal pros above, a Consumer Proposal can be more appealing than bankruptcy because there are no monthly budgets to submit, you’ll keep all your tax refunds, and there is less impact to your credit history.

Consumer Proposals VS Bankruptcy in Canada – Learn More

Are there Disadvantages or “Cons” to Making a Consumer Proposal? 

A Consumer Proposal can be a great fit for a lot of situations – especially compared to other options like consolidation loans, credit counselling plans, or trying to continue paying your debt in full with interest when you’re struggling to manage payments or growing balances. However, a Consumer Proposal may not be suitable for everyone, and some people may consider the following as disadvantages:

Your Consumer Proposal Will Take Time to Pay Off

You will get the immediate benefits of your Consumer Proposal as soon as it is filed, but of course it still takes time (up to five years) to make all your payments – and if your monthly payment is low you may need to take the full five years to get your Proposal payments finished.

While this timeframe is reasonable in comparison to other options such as consolidation loans or credit counselling plans, it is longer than it would take to complete a personal bankruptcy (this usually takes nine months). Remember though that you can pay off your Proposal early.

What are my Options if I’ve Done a Consumer Proposal Before?

You Need to Complete All the Terms of Your Consumer Proposal

Although you can defer two of your Consumer Proposal payments over the course of the Proposal, if you miss three payments your Consumer Proposal will be considered in default and will be annulled (essentially cancelled).

If your situation changes and you can no longer afford your Consumer Proposal payment it may be possible for you to amend your Proposal – or you could abandon your Proposal and declare personal bankruptcy (although this is less common). It’s always best to talk with your Licensed Insolvency Trustee so you can decide how to move forward.

Consumer Proposals Step-by-Step – Learn More

Your Credit Rating is Temporarily Affected

Any time you don’t pay your debts in full as per the original borrowing terms, your credit rating will be impacted in some way, and it’s no different with a Consumer Proposal.

An R7 note will be on your credit report for three years from the date you complete your Proposal, or six years from the date you filed it – whichever comes first. This is similar to credit counselling plans, and less severe than a bankruptcy filing (which would show as an R9 for six years following your discharge (release) from bankruptcy).

It’s important to understand this note is temporary and you can begin rebuilding your credit right away and even get new credit before your Proposal is complete. Tips, tools and resources around rebuilding credit are provided as part of the financial counselling sessions.

Credit Rebuilding After Insolvency – Learn More

4.9

Based on 3285 reviews

Review Us

– Jayvee Lester De Castro

I highly recommend Sands and Associates especially Jennifer Thom. If you have problem with you debt. She will give you the best options and support throughout the process. – Jayvee Lester De Castro – 1 day ago 

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– Jarrod Barratt

I’ve been having financial hardship for quite some time now and I am pleased I reached out to Sands & Associates recently. They were very quick to get started on helping me with relief and I never once felt judged in the process. Omer and Jennifer were very polite and informative in the process and I thank you very much for your help and support. I would recommend Sands & Associates to anybody looking for some flexibility in their financial struggles. – Jarrod Barratt – 2 days ago 

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– All the good things

I found Jennifer Thom to be very helpful and friendly going over my options to get my debt dealt with. I felt welcomed without judgment and she made my stress and anxiety lessen which was huge for me. Thank you for your help and I look forward to a new future where I can be in control and not worried about how I’m going to survive debt. All the best. Will recommend. – All the good things – 2 days ago 

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– Saba N.

Sandra was amazing from start to finish with my consumer proposal. From answering questions and getting back to me in a timely manner when I knew she was very busy, the process was quick and painless. Paying this off will be great and then I can build up my credit again! Thanks again, Sandra ♥️ – Saba N. – 2 days ago 

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– Ali D

I went to Sands & Associates because I was overwhelmed with my debt and had no idea what to do. Camille helped me set up my consumer proposal, and honestly, she made the whole process so much easier than I expected.

She explained everything clearly — what a consumer proposal is, how it works, what my monthly payment would look like, and what debts would be included. She never made me feel embarrassed or judged, just supported.

Because of her, I finally feel like I have control over my finances again. She walked me through every step, answered all my questions, and made sure I fully understood what I was signing up for. I’m so relieved and grateful.

If you’re thinking about a consumer proposal or just don’t know where to start with your debt, talk to Camille. She’s patient, caring, and really knows what she’s doing. Highly recommend! 🙌 – Ali D – 2 days ago 

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– Shubham Batra

I had an exceptional experience with Sands & Associates during one of the most stressful periods of my life. I was overwhelmed, anxious, and unsure of where to turn, but the team treated me with genuine care and understanding from the very first moment.

Helen was absolutely amazing, patient, compassionate, and incredibly knowledgeable. She made everything easy to understand and helped me feel supported at every step. Hashan was also extremely helpful and kind, always quick to respond and guiding me with professionalism and empathy.

Thanks to both of them, I finally felt relief and clarity during a really difficult time. I’m truly grateful for their support and highly recommend Sands & Associates to anyone who needs trustworthy help and real compassion. – Shubham Batra – 2 days ago 

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– Emilee Stonehouse

I am very happy I got to work with Sand & Associates. It has been making life so much easy dealing with the debt I had. Plus working with Dana, and everyone there has been a delight to move things forward and easier. Thank you Sands & Associates! – Emilee Stonehouse – 3 days ago 

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– ga wa

Great and quick communication
Selina helped me with my case.
Was so stressed, quick responses from her helped me calm down.
Thank you so much Selina
You are awesome – ga wa – 4 days ago 

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– Jenna Sullivan

Working with Carolyn was an absolute relief. From our very first conversation, she made what could have been a stressful situation feel manageable and even hopeful. She explained everything clearly, answered all my questions with patience and understanding, and made sure I felt supported every step of the way. Her professionalism and compassion made a huge difference, and I’m incredibly grateful for her help. I would highly recommend Carolyn and Sands & Associates to anyone who needs guidance and wants to feel truly cared for through the process. – Jenna Sullivan – 4 days ago 

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– Deep Brar

I can’t thank Sands & Associates enough, especially Jagdip Dial, for helping me through one of the most stressful times in my life. I was buried under debt and didn’t know where to turn, but Jagdip treated me with genuine kindness and respect from day one.

He walked me through every detail of the consumer proposal process, explained everything clearly, and never once made me feel judged. Because of his patience and guidance, I finally feel like I can breathe again and start rebuilding my life with confidence.

If you’re struggling with debt and feeling hopeless, please reach out to Jagdip and the team — they truly care, and they’ll help you find a way forward. – Deep Brar – 4 days ago 

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Some Types of Debt Can’t be Cleared in a Consumer Proposal

There are a handful of debts that won’t be cleared through a Consumer Proposal, or by any means other than paying them. The most common include:

• Child support or spousal support debts
• Court-imposed fines and debts due to fraud
• Student loans where you have been out of school for less than seven years– older student loans can be consolidated and cut just like any other debt.
  • If it’s been more than five but under seven years since you finished studies and you’re still struggling with your loan payments a court may order your government student loans be forgiven upon completion of your Proposal.

How is a Consumer Proposal Payment Calculated?

Debt repayment terms in a Consumer Proposal are flexible and tailored to your individual situation, making a Consumer Proposal a suitable debt management option in many circumstances.

Consumer Proposals filed by Sands & Associates’ Licensed Insolvency Trustees are often successful in reducing debts by up to 50-80% and some considerations to determine how much debt your Consumer Proposal could cut include:

• Your overall personal situation and finances including income, expenses, and household size.
• How much debt you have, and who your creditors are.

The rules around Consumer Proposals give you lots of flexibility in terms of how long you can stretch out your Proposal payments and how much of your debt you repay – and unlike many consolidation loans that can last seven or ten years, a Consumer Proposal will last a maximum of five years, and terms of two-to-three years are quite common.

A Licensed Insolvency Trustee will help you work out a suitable offer to your creditors that takes into account your personal financial situation including your household budget, the amount of debt you can afford to repay and other financial goals you may have.

A Consumer Proposal Starts with a Free, Confidential Consultation

When you want qualified debt advice the best thing to do is talk with a local Licensed Insolvency Trustee and have a free, confidential consultation. Sands & Associates serves residents across BC and in 30 minutes we can help you explore all your options, including Consumer Proposals.

• By the end of this conversation, you should have clear information about the next steps in the debt-free plan that you decide is right for you, and many people feel relief right away knowing that there is a way forward from the financial anxiety and debt-stress they have been feeling.

You owe it to yourself to get debt help, and you’re not alone in finding debt solutions – we’re here to help you!

Connect with a non-judgmental BC Licensed Insolvency Trustee and get started with a debt-free plan that’s right for you – book your free, confidential debt consultation today.

The post Consumer Proposal Pros and Cons appeared first on Sands & Associates.