Consumer Proposal Alberta

A Powerful but little known alternative

You just received your paycheque and your bills are due. You have a good job, but it never seems that you have enough money to go around. You can make payments, but not as much as your creditors want. If this is the constant struggle you find yourself in month after month, and it is wearing you down, you might want to seek debt relief through a negotiated settlement with your creditors by filing a Consumer Proposal. A Consumer Proposal allows you to pay a reduced portion of your debt while still maintaining control over your assets and your life.

What is the Purpose of a Consumer Proposal?

Consumer Proposals were created to offer both creditors and debtors with an alternative to bankruptcy whereby creditors can recover a portion of their claims and an individual can obtain relief from an overly burdensome debt load.

Consumer Proposal vs. Debt Management Plans

A Debt Management Plan is not legally binding on the participants and it relies solely on the cooperation of all participants. Debt negotiation or relief through a settlement or management plan can be difficult to maintain over an extended period of time, as the cooperation of everyone is difficult to achieve.

A Consumer Proposal (also referred to as a Personal Proposal, or just a Proposal) to your creditors is a legally binding bankruptcy alternative that is administered through the Courts by a licensed trustee or proposal administrator who summarizes your financial circumstances and prepares a report to your creditors on your behalf.

In order to be eligible for a Consumer Proposal, a person must have debts which exceed $1,000.00 but are not greater than $250,000.00, and they must have the ability to repay a portion of their debts and would prefer to avoid personal bankruptcy and are looking for an alternative to bankruptcy to resolve their financial problems.

Advantages of a Consumer Proposal

  • You can offer or negotiate to pay a reduced portion of the debt you owe;
  • You receive a Stay of Proceedings preventing any creditors from taking any legal action against you;
  • Interest is stopped on the filing of a Consumer Proposal and if the Proposal is accepted, no interest is payable throughout the entire term of the Consumer Proposal;
  • A Consumer Proposal provides for a repayment period of up to 60 months or 5 years;
  • Wage Garnishees are stopped, save and except orders for maintenance or alimony;

Acceptance of your Consumer Proposal is determined by a vote of your creditors with acceptance
determined by the majority of those who participate in and respond to your Consumer Proposal. If
you have ten (10) creditors and only three (3) creditors participate or respond, you only need two creditors who hold the majority of votes to vote in favour. Once accepted, all of your unsecured creditors are bound by the terms of the proposal. If no creditors respond to a Consumer Proposal, and that does happen, the Consumer Proposal is deemed accepted.