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If you have found yourself in financial distress, and are thinking about a consumer proposal, there are a number of things you’ll want to know before proceeding with the process:
- Consumer proposals are ideal for debtors who have a good job, who make a stable income, and who can afford to make payments, but need extra time to do so.
- Consumer proposals are also good for those with debts over $5,000, and to a maximum of $75,000.
- A consumer proposal is somewhat like a debt management plan; but a consumer proposal is legally binding and is administered by the courts and a licensed bankruptcy trustee in Sackville, Nova Scotia.
- Advantages of consumer proposals include a maximum period of 5 years, it is usually accepted by creditors, interest is frozen from the date you file, you can negotiate to repay only a fraction of the debt, wage garnishments are stopped, and your creditors may not pursue legal action.
- At the start of the process, your licensed bankruptcy trustee will review your financial situation to determine the amount you can afford to pay back each month.
- If the numbers seem realistic to both you and your creditors, the trustee will arrange the necessary paper work.
- As stated by the Bankruptcy and Insolvency Act, your creditors have 45 days to vote for or against your proposal. If 50% or more vote for your proposal, it is deemed suitable by all creditors.
- If 25% or more of your creditors do not agree to your proposal, your trustee will call a meeting of creditors to re-discuss the proposal. It is mandatory that you attend this meeting.
- Fifteen days following approval by creditors, your proposal will be approved by the court. You and your creditors are then locked into the terms of the proposal.
- In Sackville you are permitted to miss up to two payments during the proposal period. Your trustee will simply add two payments onto the end. However, if you miss more than two, the proposal will be annulled by the court. Your creditors can then apply to have your wages garnished, and interest charges are applied to all debts.
- When you file a consumer proposal, your credit rating will be adjusted to reflect your financial situation, and will stay that way until the proposal is complete. A note will also remain on your credit report for up to seven years starting from the date that you filed.
- Trustee fees in Sackville are set by the Superintendent of Bankruptcy. Typically your trustee is paid out of the proceeds of your proposal.
- If you are experiencing financial trouble, and want to file a consumer proposal, please contact us today. Our bankruptcy trustees in Sackville, Nova Scotia will offer you an initial consultation free of charge. We will discuss your personal situation, and help you determine the best possible solution for you.
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