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.

Managing Debt With a Consumer Proposal

A Consumer Proposal can consolidate virtually all your debts without borrowing and offer to repay your creditors the portion of your debt that you can afford over a period of up to five years. You may be able to reduce your debt by as much as 50-80%, as your creditors will agree that the unpaid balance will be considered forgiven at the end of your Consumer Proposal.

• Consumer Proposals are one of only two options available to Canadian consumers that can forgive almost any type of debt, including:
  • Basic consumer debts like credit cards, payday loans, lines of credit, overdrafts.
  • Government debts such as outstanding income taxes, CERB overpayments, student loans, and more.
• Because your debts are frozen and the balance that you’ll repay (interest-free) is usually substantially reduced, your new monthly debt payments should be much more manageable than if you continued trying to make your monthly payments as before – and you’ll have a clear ‘debt-free’ date because Consumer Proposals are limited by law to a period of 60 months or less.

Your credit score or history are not qualifying factors, and a Consumer Proposal can be made by an individual who owes between $1,000 and $250,000 of debt excluding any mortgages on your residence.

• If you owe more than $250,000 there’s another type of Proposal that may be more suitable, and some different rules will apply.
• A joint Consumer Proposal can be filed by two people together (i.e. couples, business partners, etc.), doubling the upper limit to $500,000.

Read More About Debts a Consumer Proposal Can Consolidate

Consumer Proposals also offer flexibility in that you can choose to manage ‘secured debts’ (that is, debts linked to an asset) outside of your Proposal. For example, if you have a financed vehicle or a mortgage in good standing and you want to continue with those agreements, you can do so uninterrupted. As long as you continue to make the payments on your car and/or home, a Consumer Proposal will allow you to retain those assets without issue.

Sands & Associates’ Approach to Consumer Proposal 

Sands & Associates works with Consumer Proposal clients across British Columbia – here’s the approach we take with our clients:

1. Have a free, confidential, non-judgmental consultation. In this initial meeting (which could be in person at a local office near you, over the phone, or online) we’ll take time to understand your situation, needs, and goals. We’ll talk with you about all your options, including Consumer Proposals.

If you decide that a Consumer Proposal is the best fit for you and your situation, we’ll work together to determine an offer that is affordable for you, and that your creditors are likely to agree to.

2. When you’re happy with the plan, you’ll have another meeting to review and sign the Proposal documents that we’ve prepared on your behalf.

After this your Licensed Insolvency Trustee will file your Proposal with the Office of the Superintendent of Bankruptcy, the government branch that oversees this process, and send your offer to your creditors for their consideration.

3. Your creditors will have 45 days to review and consider your Consumer Proposal offer and will submit a formal vote to your LIT confirming if they are willing to accept it.

Immediately after signing the Proposal documents, you should no longer be making payments to your creditors and your LIT will take on all communications with your creditors on your behalf, so you don’t need to deal with them further.

When your Consumer Proposal is accepted you’ll make the payments you offered, complete two private, one-on-one financial counselling sessions, and fulfill any other conditions you agreed to – and at the end you’ll be issued a ‘Certificate of Full Performance’ and legally released from all debts that you included in your Consumer Proposal.

Learn More About Starting the Consumer Proposal Process

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– 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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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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– 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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Are Consumer Proposals Usually Accepted by Creditors? What Happens if They Don’t Agree? 

While your creditors do get to vote on whether they will agree to your Consumer Proposal, it can be reassuring to know that Proposals filed by Sands & Associates are almost always accepted – it’s quite rare for a Consumer Proposal to be rejected. One of the main reasons for this high rate of acceptance is that in a Consumer Proposal you are providing your creditors a better return on your balance than if you were to file for bankruptcy, which, in most cases, would result in creditors receiving nothing.

Your creditors have 45 days to consider your Consumer Proposal, file a ‘proof of claim’ with your LIT and vote. They may:

• Vote to accept your offer as filed (the debt repayment, time you’ll have to make your payments, and other terms that may be offered by you)
• Vote against your offer
• Vote against your offer as filed and ask to have a ‘meeting of creditors’
• Not vote at all (nor even file a proof of claim)

If the majority of your participating creditors (over 50% by dollar value) vote to accept your offer the Consumer Proposal will be legally binding and provide you full protection from all the creditors you included in your Proposal – even those who didn’t vote, file their claim, or who voted against your offer. For example:

• If you owe a total of $25,000 to five different creditors and only two of them who are owed a total of $15,000 vote to accept your Proposal, it will be accepted and binding on all five creditors, even if the other three (holding $10,000 of the total debt) vote against it.

How Much Debt Will a Consumer Proposal Eliminate? Learn More

Meeting of Creditors

Your Proposal can only be rejected at a meeting of creditors, and a meeting of creditors will be held within 21 days if one is requested by one (or more) of your creditors who are owed 25% or more of the total value of your proven debts.

This meeting offers an opportunity to negotiate different Proposal terms that can help your Proposal pass if one or more creditors were not happy with your original offer, and/or provide more information about your situation. At this meeting your creditors will vote to accept or refuse your Proposal, again the outcome is decided by a majority by dollar value – and in the event there is no quorum of creditors at your meeting, your Proposal is deemed to be accepted.

• In a less common case where your original Proposal isn’t accepted within the 45-day period, your creditor(s) may by more likely to accept a revised Proposal that offers more return to them, generally achieved by either increasing your monthly payment amount, or extending the time of your monthly payments.
• Prior to the meeting your Licensed Insolvency Trustee will continue to communicate with your creditors on your behalf and work to determine what terms your creditors would accept.

In the rare case that your Consumer Proposal is rejected, you have a few options to consider, including whether to amend your Consumer Proposal and refile it, or whether declaring bankruptcy is a better option for you. Your Licensed Insolvency Trustee can help you explore these remedies further and weigh the pros and cons of your options. 

What Are My Options if I’ve Done a Consumer Proposal Before?

Talk to a Licensed Insolvency Trustee About Filing a Consumer Proposal 

A Consumer Proposal can be a great solution to get a handle on problem debt – they are almost always accepted and offer many benefits compared to other solutions including consolidation loans and credit counselling repayment plans, both of which can have considerable limitations and high costs.

To do a Consumer Proposal you must work with a Licensed Insolvency Trustee, no other debt advisor can file one for you, and you can’t file one by yourself. No referral is required to talk with a Licensed Insolvency Trustee and there is no impact to your credit history either. To explore whether a Consumer Proposal could be a good fit for your situation and talk about other solutions you may want to consider, reach out to a Licensed Insolvency Trustee local to you.

• All Licensed Insolvency Trustees will offer you a free, confidential consultation and we are Canada’s official debt help experts, fully qualified and endorsed to help you find debt solutions.
  • If you’ve been advised against a Consumer Proposal by anyone other than a Licensed Insolvency Trustee, it is strongly recommend you see a LIT for a second opinion.
• LITs are neutral parties, and we will help you understand all your options. No two situations are exactly alike, and considerations can include how much debt you have, who your creditors are, as well as your income, household situation and other factors specific to you.

We understand it can feel difficult to reach out for help, and our goal is to offer you information and support in a caring, straightforward and empathetic manner. By the end of your consultation you should have a clear outline of your next steps in your debt-free plan.

Connect with a non-judgmental BC Licensed Insolvency Trustee and get started with a debt-free plan that works for you – book your free, confidential debt consultation with Sands & Associates now.

The post Do Creditors Usually Accept a Consumer Proposal? appeared first on Sands & Associates.

Sands & Associates is committed to providing support and debt solutions with a caring, non-judgmental “debt smart with heart” approach and we are excited to announce we have expanded our BC office network with the opening of Sands & Associates’ office in North Vancouver.

We believe that a debt problem can happen to anyone at any time, and that everyone deserves to live free from the overwhelming stress of debt.

“I am extremely grateful for the services provided by Sands & Associates. Their deep knowledge of finances helped create a sound financial plan that substantially reduced my debt by half. 

They mediated with my creditors in a timely and professional manner and were available even on Sundays to address my concerns. Their insights have fundamentally changed the way I manage my finances. They were generous with their knowledge and empathetic to my situation. 

Sands & Associates helped me overcome this burden, addressing the issues at hand which also helped my well-being … I wholeheartedly recommend their services to anyone…”

– Sands & Associates Client

Talk with a local Sands & Associates debt help expert and get a debt-free plan that’s right for you. Book your free, non-judgmental consultation today.

Get Qualified Debt Advice at No Cost 

Debt can feel like an impossible problem, and many Canadians don’t know where to turn for guidance in how to deal with debt issues. A Licensed Insolvency Trustee is the best professional to turn to, and we are Canada’s only official debt help experts, fully endorsed and qualified to help consumers and business owners explore their options to manage, settle, and have debts forgiven.

To get free, qualified debt advice reach out to a Licensed Insolvency Trustee local to your province – there are no qualifiers to get confidential support, and no referral is needed.

British Columbians can connect with Sands & Associates’ Licensed Insolvency Trustees seven days a week, with our full suite of debt help services available over the phone, online, or in person from a local office near you.

Warning Signs of a Debt Problem 

If you’re experiencing any of the following debt warning signs, or simply want to learn about debt management options that can help you pay off your debt faster and at less cost, talk with a Licensed Insolvency Trustee. Without taking action a growing debt problem will almost always escalate, and you owe it to yourself to get debt help and move forward with your life.

• Anxiety or stress about your finances and paying your debts
• Only being able to afford making minimum monthly payments on your credit card debt
• Debt balances that don’t change, despite making regular payments
• Reliance on credit to pay your regular monthly living expenses
• A debt repayment plan that would take more than five years to clear your (non-mortgage) debts

Learn More About Signs of a Debt Problem You Shouldn’t Ignore

Solutions to Pay Off Credit Card Debt and More 

Credit card debt is a top problem debt among BC consumers and fortunately, there are options to help you get control over these and other common consumer debts including (but not limited to) payday loans and overdrafts, as well as government debts such as outstanding income tax and business GST balances, CERB overpayment, student loans and more. Solutions can include:

• Filing a Consumer Proposal, one of the fastest growing debt solutions for Canadians, and this specialized legal debt tool can consolidate and cut your debt by up to 50-80%, allowing you to clear your debt within five years.
  • A Consumer Proposal is not a loan, so there is no credit check required, and no interest or professional fees are charged on top of what you repay to your creditors.
• Repaying your debt through a credit counsellor can help manage your debt if your balances are low and you have only basic consumer debts that are eligible for an informal repayment plan.
• Personal bankruptcy may be an alternative for debt relief where your income is limited and you are unlikely to be able to afford to repay a meaningful portion of your debt.

Explore these and other BC debt resources together with a Licensed Insolvency Trustee. In under an hour you can get a debt-free plan tailored to your situation, and come away with a clear outline of your next steps. You are not alone in solving a debt problem, and you have options!

Book your free, confidential debt consultation with Sands & Associates today – our caring, non-judgmental team of Licensed Insolvency Trustees, Estate Manager, and Qualified Insolvency Counsellors are here to help you.

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

Dealing with debt can feel frustrating, but the truth is that debt is often a problem like many others in that it does have solutions – and knowing is not owing! 

Types of Debt Management Plans 

Debt management plans for personal debt generally fall under one of the following categories:

• Do-it-Yourself Debt Repayment Plans
• Informal Debt Repayment Plans
• Formal Debt Management and Debt Relief Solutions

As Licensed Insolvency Trustees, one of our key services is providing consumers a complete, unbiased overview of all their options and resources to help them deal with their debt, tailored to each person’s situation. In less than an hour we can help you with a personalized debt-free plan that’s right for you.

Depending on your specific situation, unique needs, and personal goals, you might have several solutions and tools to consider implementing as part of your debt management plan – including five of the most common types of consumer debt solutions detailed below.

Do-it-Yourself Debt Management – Pros and Cons

Some debt repayment strategies you might undertake on your own as part of a self-directed plan could include solutions such as: 

Paying Your Debt Off in Full

Pros:

• Beyond a balanced personal budget and the ability to stick to it, no outside help is needed.
• You may be able to informally negotiate with your lenders to get reduced interest rates on your various accounts.
  • Be sure to ask about any credit rating impacts if your interest rates are reduced.

Cons:

• If it’s difficult for you to consistently pay substantially more than your minimum monthly payment requirements each month, it could take a long time to see a zero balance on your debts.
• Without ample savings, even a small upset or added demand in your budget can easily derail your plans and set you back in your debt-free goals.

How to Balance Your Budget to Pay Off Debt and Cut Money Stress – Learn More 

Refinancing with a Consolidation Loan

Pros: 

• Consolidation loans typically have a lower interest rate than credit cards, and this may reduce your total interest costs as you work on clearing your debt.
• No more juggling multiple debts and payment due dates.

Cons: 

• Consolidation loans, especially at ‘best rates’, are often difficult to qualify for. Most people will need to pledge an asset as collateral against the loan, or get a co-signer, and both of these approaches can be risky.
• You’ll be repaying eligible debts in full – with interest, which means your payments (even with a reduced interest rate) can still be difficult to afford, and carrying debt remains expensive.

Additional Tips for Success:

• You may also be able to get out of debt faster with a combination of ‘do-it-yourself’ payments and resources, such as BC’s Statute of Limitations, Request for Communication in Writing and more.
  • A local Licensed Insolvency Trustee in your province will be able to guide you in this.
• Avoid using your credit accounts while you work on paying down your existing debt. Continuing to rely on credit after taking out a consolidation loan often results in a bigger debt problem since you’ll now have a consolidation loan and credit card bills to pay. 

Learn More about Why Borrowing Isn’t Always Best for Consolidating Debt

Credit Counselling and Debt Settlement – Pros and Cons

As a Canadian consumer it’s important to be aware that although there are different types of debt help agents operating in the market and offering debt solutions, they are not created equal – and some come with significant ‘buyer beware’ disclaimers. One common (informal) debt repayment solution you might be aware of is:

Using a Credit Counselling Service

Pros: 

• If you only have a small amount of basic consumer debt you may be able to simplify your finances by consolidating eligible debts in an informal credit counselling plan that requires monthly payments for up to five years.
• You’ll pay off all your debt, but eligible creditors may agree to stop charging interest.
• It’s much easier to qualify for a credit counselling program than a consolidation loan, and you won’t need to use an asset as security or get a co-signer.
• Educational resources and workshops for money management may be available as part of the credit counselling process.

Cons:

• Creditors who turn down your credit counselling debt repayment plan must be paid separately.
  • Government creditors (like Canada Revenue Agency or ICBC) will refuse to participate in ALL for-profit and non-profit credit counselling programs and will require their debts to be paid separately, plus interest charges.
• A fee is charged for credit counselling services on top of the settlement payments to your creditors. Even if you receive relief from future interest charges, you may not cut payments substantially since you will be paying a fee on top of paying back 100% of your debt to your creditors.
  • No government body regulates credit counsellor qualifications, fees or dispute mechanisms.
• Credit counselling organizations are heavily bank-funded and some are registered as collection agents, which creates a conflict of objectives / conflict of interest.
• Your credit history will reflect your credit counselling plan for two to three years after you have repaid all the accounts included in your credit counselling plan.

Debt settlement agents may call themselves credit counsellors, but their debt repayment plans usually differ in that they offer services to settle your debts one account at a time for less than you owe by negotiating a lump sum payment that is typically less than the balance owing. (You can also attempt this type of settlement on your own if you have a lump sum available.) 

Credit Counselling or Debt Settlement? What’s the Difference? Learn More

Credit Counselling Cautions to Note:

• Credit counselling is an informal (i.e., not legally regulated) option – anyone can call themself a credit counsellor without any specific training, so the onus is on the consumer to always do their due diligence.
• Agents who provide informal debt repayment plans cannot offer you any protection from your creditors and neither debt settlement agents nor credit counsellors can compel your creditors to accept their services / your offer.
  • Creditors aren’t legally bound by these offers; they can continue collection action or even escalate collection efforts.
• Most debt settlement agents charge a high fee for their services, and all credit counselling plans have a cost, even if you are working with a non-profit agency.
• Don’t be fooled by misleading advertisements – there is no such thing as a “government debt grant” or “government debt program”.
  • The only government-approved debt solutions or providers in Canada are the legal debt management options available by working with a Licensed Insolvency Trustee.

All Licensed Insolvency Trustees in Canada offer free, confidential debt consultations – simply reach out directly to a local Licensed Insolvency Trustee in your province.

Learn More About Canadian Debt Relief Services 

Debt Relief and Consumer Proposals – Pros and Cons 

Canadians have two kinds of formal debt management and debt relief options to consider, making a legal debt solution a good choice to help pay off debt for a variety of situations and financials goals.

Making a Consumer Proposal 

Pros:

• You can write-off a large portion (often up to 50-80% or more) of your consolidated debts (including government debts) with no interest charges or additional costs of administration.
• Legally prevents your creditors from contacting you for payments or continuing collection actions or wage garnishments.
• Flexible payment terms based on household income.
• Professional fees are included in what you repay – no fees added to your settlement offer.
• Can be paid off in full at any time without penalty.
• Credit rebuilding tools and one-on-one money management education with a qualified financial counsellor are included in the process.

Cons:

• Your credit history will temporarily reflect that you did a Consumer Proposal, for three years after you have completed the Consumer Proposal, or six years from the date you started it (whichever comes first).
  • Most people establish a positive credit history within a year or less, and you can apply for and receive new credit any time. Prepaid and secured credit card products are also always available.

10 Facts You Should Know About Consumer Proposals – Learn More

Filing for Personal Bankruptcy

Pros:

• You may write-off as much as 100% of all your debts with zero interest.
• Bars creditors from contact, collection activity or wage garnishments.
• Most people who are considered to have a ‘low-income’ will only pay an administrative fee of $2,700 (broken into a manageable payment plan).
• The bankruptcy process typically lasts only nine months – the fastest time to “debt-free” compared to other options.
• Financial management tools and credit coaching with a qualified financial counsellor are included in the process.

Cons:

• Your credit history will reflect your bankruptcy filing for six years following your discharge (exit) from bankruptcy. However, with the right actions most people are successful in establishing new credit within one year after a bankruptcy proceeding (if not sooner).
  • If other options are unsuitable, the ‘reset’ of bankruptcy generally provides a quicker path to rebuilding your credit history, and overall finances.

To Use a Legal Debt Solution:

• Only a Licensed Insolvency Trustee is authorized to help you with legal debt solutions that can forgive a portion, or all, of your debt.
  • Don’t be confused by advertising for informal debt management plans that is made to sound like a Consumer Proposal, always ask “Are you a Licensed Insolvency Trustee?”
• You don’t need to get or pay for any of the following:
  • A referral to speak with a Licensed Insolvency Trustee
  • Any ‘add-on’ service when you’re working with a Licensed Insolvency Trustee
  • Financing to do a Consumer Proposal

Don’t rely on second-hand advice or information, take an hour to talk with a Licensed Insolvency Trustee about your specific situation and options. We often help people who waited months or even years before reaching out because they had the wrong advice or incorrect information.

When is Filing for Personal Bankruptcy the Best Option? Learn More

Getting Reliable Debt Advice from a Qualified Professional 

There’s a lot to consider in deciding how to deal with your debt and understanding which solution is the best for you and your situation, but you are not alone – Licensed Insolvency Trustees are here to help break the information down, offering you support in making a choice to move forward.

Licensed Insolvency Trustees are the only federally regulated debt professionals, and we hold a unique designation and endorsement, with a specific skillset and knowledge that allows us to offer complete debt help services to consumers and business owners dealing with debt.

There are many reasons why you might want to seek debt advice from a Licensed Insolvency Trustee, including (but not limited to):

• Understanding your rights and remedies when it comes to your debt, with solutions for everything from credit cards to personal loans, payday loans to CERB debt and beyond.
• Knowing what you can do when you cannot pay a debt, or whether a debt is collectable.
• Seeking debt relief, including protection from creditors pursuing you with court actions and garnishments.

Get started with your debt-free plan by contacting a Licensed Insolvency Trustee local to your province to set up a free, confidential consultation. If you’re in BC, Sands & Associates can help you from one of our local offices, or a convenient phone or video appointment.

At the end of your consultation, you should have a better understanding of your situation and your options, with a clear outline of your next steps. Taking the first step of asking for help can be one of the toughest – but it’s worth it, and there is light at the end of the tunnel.

Ready to get started? Understand, compare, and choose your best debt option with the help of a caring, licensed debt help professional at Sands & Associates. Book your free consultation now!

The post Comparing Debt Management Plans – Pros and Cons of Consumer Debt Solutions appeared first on Sands & Associates.

What Will it Cost Me to File a Consumer Proposal?

The fees of the Licensed Insolvency Trustee who files your Consumer Proposal are set by federal law and government tariff, and these fees include all the costs for completing the administration of your Consumer Proposal – start to finish.

• Because Licensed Insolvency Trustee’s fees are set by tariff, you will not be billed or invoiced – these fees are simply paid out of the money your creditors receive under the Consumer Proposal, and no additional cost is paid by you as the person who is making the Consumer Proposal.
• There is no interest charged on the debt consolidated in your Consumer Proposal.

How Do Monthly Consumer Proposal Payments Work?

The Consumer Proposal amount offered to your creditors will be based on several factors, including your income and overall debt, and you will make your monthly payments directly to your Licensed Insolvency Trustee.

• Your Licensed Insolvency Trustee will deal with your creditors on your behalf, and will periodically distribute payments to your creditors, in accordance with your specific Consumer Proposal terms.

For example: Your Consumer Proposal to settle total consolidated debts of $35,000 offers to repay a total of $10,800 to your creditors, which you will pay by monthly payments of $300 for 36 months. You would then pay:

• $300 within 30 days of signing and filing your official Consumer Proposal
  • No payments are required in advance of the filing – there are zero upfront fees
• $300 per month, for the remaining 35 months of your Proposal

In the scenario above, you would only have to repay around 30% of your total debt to have it considered settled in full, and interest charges and penalties from your creditors will immediately stop upon filing your Consumer Proposal.

All you need to pay in your Consumer Proposal is what you are offering to your creditors – costs of administration, and the Licensed Insolvency Trustee fee are essentially paid by your creditors.

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Transparency in the Consumer Proposal Process 

At the end of your Consumer Proposal, you and the creditors included in your Consumer Proposal will receive a final accounting document called a Statement of Receipts and Disbursements.

• This official document helps to provide full transparency and will detail all payments made through the Consumer Proposal and show a clear breakdown of the legal tariffs that were used to determine the Trustee’s fees and the government’s levy (charge).
• The Statement of Receipts and Disbursements will also detail the creditors that received debt settlement payments (called dividends) through the Consumer Proposal, and exactly how much each creditor received.

Find out how a Consumer Proposal could work for you, book your free confidential debt consultation with Sands & Associates today. We have a network of local BC offices to serve you online and in-person.

The post How Much Does it Cost to File a Consumer Proposal? appeared first on Sands & Associates.

Statute of Limitations on Debt in BC – The Basics

In the province of British Columbia, Limitation Act is the legislation that sets out details for limitation periods; limitation periods cap the length of time people have to sue for a debt owing, and provide clarity around when liability begins and ends.

BC has a two-year basic liability limitation period, which is two years after:

• The date an unsecured debt was incurred;
• The last payment made against it was made; or
• The last provable acknowledgment of the debt by the debtor (person who owes the money).

What Happens When You Can’t Pay Your Debt? Learn More

Exceptions to BC’s Two-Year Limitation Period

It is important to note that there are exceptions to the two-year limitation period.

• The limitation period varies by province (up to six years in other provinces);
• Not all debts will be subject to this limitation period, such as:
  • Civil claims that enforce a monetary judgment;
  • Debts owing to government bodies like Canada Revenue Agency or student loans;
  • Arrears of child or spousal support;
  • Various other legal claims (damages due to sexual assault, title to property, etc).

Learn About Debt Solutions for Having Government Debts Forgiven

Can the Two-Year Statute of Limitations Period on Debt Restart?

People need to be aware that the limitation period is extended if the debt is acknowledged.

• There are two types of acknowledgments:
  • If a payment is made on the debt (even if it’s only $1!); and
  • If there is a written confirmation of liability
    • Includes e-communications.

Either of these acknowledgements will reset the limitation periods. It should also be noted that if a person makes a payment or a written acknowledgement of the debt outside the limitation period, this does NOT restart the limitation period….so timing is crucial.

Credit Impact of “Statute-Barred” Debt

Even if the two-year limit on a debt being collectable has passed, it can still be reflected on (and therefore impact) your credit history and credit score. Most transactions that the credit bureaus consider “negative”, such as bouncing a payment, or a judgment (paid or unpaid) will be shown on your credit history for seven years.

Can the Statute of Limitations be Used to Resolve Debt Problems?

Using the limitation period as a mean to solve a consumer debt problem may be a reasonable debt solution, depending on the person’s specific circumstances.

Individuals who have no income or assets, and do not foresee this changing, may find themselves in a position of being able to “wait out” the two-year period:

• This can be a particularly difficult option, especially if you’re at the beginning of the two-year period;
• Generally, you could expect numerous collection calls and/or correspondence in the meantime;
• If the situation changes (you gain an asset, or income a creditor could seize etc), waiting out the limitation period may not remain a viable debt solution.

Many people find that they have old, or aging debts but they want to wipe the slate clean right away. Other people may find that they’re unable to accurately track when payments were made, or the debts were acknowledged. Others still simply want the creditor contact to stop – waiting out a two-year period can be very difficult and stressful!

Debt Solutions to Consolidate and Cut, or Forgive Your Debt

A Licensed Insolvency Trustee can help you understand all potential debt solution options available to you, including evaluating whether relying on the statute of limitations could be your best way to deal with your debt.

Other legal debt solutions you can explore together during a free, confidential debt consultation with a BC Licensed Insolvency Trustee include:

• Filing a Consumer Proposal: This unique debt consolidation tool allows you to consolidate virtually all your debts into one repayment plan coordinated by a Licensed Insolvency Trustee, and repay only the portion that you can afford over a period of up to five years, without interest or added fees.
  • You may be able to cut your debt up to 50-80%, including credit cards, payday loans, government debts and more.
• Declaring personal bankruptcy: In Canada bankruptcy can allow you to have up to 100% of your debts forgiven, while retaining all your assets and paying a simple administration fee.
  • Most people “exit” bankruptcy in as little as nine months, and rebuild their credit history within a year or two.

Talk with a local Sands & Associates debt help expert today and find out how we can help you get out of debt.

_{This content is not intended to be specific legal advice; it is intended to be a simple guide in layman’s language to provide a basic overview only. E. Sands & Associates Inc accepts no responsibility for its use other than as intended. The law is an ever-changing body of statutes and decisions, and the reader is advised to seek legal counsel for specific matters relating to their situation.} 

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