Bankruptcy is not the only option

A consumer proposal is a legally binding agreement that is regulated by the Office of the Superintendent of Bankruptcy. This is a very common solution used to solve debt problems. Filing a consumer proposal often results in the reimbursement of only 30-70% of what you owe, through negotiation with your creditors.

Types of debts that can be included

A consumer proposal is to settle your unsecured debt (debt that is not attached to property). Here are some examples :

· Credit card debt;

· Bank loans or lines of credit;

· Payday loans;

· Income tax debt;

· Medical bills;

· Old invoices that have been cashed;

· Student loans (within certain parameters).

A consumer proposal does not include debts secured by property. However, you can keep these assets throughout the proposal, as long as you are able to continue making payments.

Main advantages of filing a consumer proposal

A consumer proposal is an alternative to filing for bankruptcy. It has several advantages:

· Provides immediate relief from unmanageable debt;

· Protects you against wage garnishments and lawsuits from your creditors;

· Reduces and consolidates your debt repayment into one manageable payment;

· Usually costs less than other types of debt repayment options;

· Gives you a fresh financial start.

Qualification and who can help

Certain criteria must be met to file a consumer proposal:

· You must be insolvent (the debts are greater than your assets OR you can no longer meet the payment of your debts);

· You cannot afford to repay all of your debt plus interest, but you can afford to repay some of it;

· Your debt is less than $250,000 (excluding your mortgage);

· You are a Canadian resident or have assets in Canada.

A Licensed Insolvency Trustee (LIT) is the only professional licensed and authorized to file a consumer proposal on your behalf. AN LIT is best qualified to help you understand your financial situation and the different options for dealing with debt. An SAI will sit with you in a non-judgmental environment, review your situation with you, and help you decide on the best course of action.

If you’re struggling to make ends meet each month, finding the right debt solution can help. Visit the BDO Debt Solutions website for more bankruptcy information, or call 1 855 BDO DEBT to book a free, no obligation consultation.

Jasmin Brown is Senior Vice President and oversees the insolvency practice in Saskatchewan. She is committed to providing creative and practical debt solutions with empathy, understanding and professionalism to help people overcome their financial difficulties.

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