Plan Your Financial Recovery with Consumer Proposals in St. John's

A consumer proposal is intended as a process by which an individual may make an arrangement with their creditors to make some repayment of debts owed, rather than proceeding to a personal bankruptcy. While the trustee can provide you with the details for making a proposal, in order for it to be successful it must provide the creditors with a greater return than they would hope to receive if you were to proceed with a personal bankruptcy.


When considering making a consumer proposal in St. John’s, it is necessary to have a steady income or third parties (parent, friend, etc) who will provide you with the funds necessary to settle your debts. The amount of money required for this process will depend on your personal situation and the amount owed. The trustee will discuss these and other relevant factors specific to your situation.


The majority of individuals are entitled to file a consumer proposal, as long as the amount you owe is less than $250,000 (excluding the amount owed on a property mortgage).


What do I need for a Consumer Proposal in St. John’s?


You might be eligible for a consumer proposal if you meet the following:

  • You have debts of more than $5,000 but less than $250,000 (not including your home mortgage.
  • You have a job and can afford to make monthly payments.
  • You cannot afford to repay everyone with full interest.
  • Your debts are too high for a debt consolidation loan. 
  • You want to avoid bankruptcy.

One of the benefits of a consumer proposal is that the effect on your credit score is not as severe as a bankruptcy. They typically produce an R7 rating, as opposed to the R9 rating typically produced by a bankruptcy. A consumer proposal also makes sure that your assets are not at risk, and if your income increases your payments will not increase. In the end, you will only owe what is agreed upon in the terms of the proposal. 


What Happens in a Consumer Proposal?


When a consumer proposal is filed several things happen:

  • Wage garnishments cease.
  • Interest stops accumulating from the filing date
  • Collection companies must stop contacting you.
  • Your assets are protected. 
  • You only repay a portion of your debt within a maximum period of 5 years. 

A consumer proposal does have various administrative and filing fees. To learn more about our fees please give us a call.

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