Proposal Frequently Asked Questions

Consumer proposal filings in Alberta have increased significantly over the past 10 years. Consumer proposals are the only government approved debt settlement OPD program in Canada. There are some really big advantages to using a consumer proposal to deal with your financial problems:

• Settling your debt for less than what is owed;
• No interest on your debt once you file;
• A set monthly payment with the ability to pay it off sooner once your situation improves;
• Legally binding for you and your creditors
• No need to pay a third party "middle man" to meet with a Licensed Insolvency Trustee

To find out if a Consumer Proposal is going to benefit you, contact us at The Fryzuk Group to discuss all your options and help you make the best decision for your unique situation.

• A consumer proposal is an alternative to bankruptcy. We can help put together a proposal to your creditors with an affordable monthly payment. Creditors recognize the benefit of receiving more than they would in a bankruptcy scenario.
• You maintain control of your assets in a consumer proposal. Secured loans such as car loans, recreational vehicle loans etc. remain intact in a consumer proposal if you chose to continue with the contract.
• One Low Monthly Payment. In a consumer proposal, you can pay all of what you owe over a longer period of time, or you can negotiate to repay only a portion of the money you owe. It is not unusual to see debts reduced by as much as 70 to 80% of the original amount owed. A consumer proposal is one of the best, and safest, debt consolidation options available.
• Stop collection calls, threats gnd Garnishments: The Bankruptcy & Insolvency Act is legislation that provides protection from creditors in situations where it is needed. A consumer proposal provides creditor protection that will stop collection calls and wage garnishments. Once a consumer proposal is filed, there is immediate protection from creditors.
• Stop interest and penalties: In a Consumer Proposal, interest is stopped at the date the proposal is filed with the government. This includes penalties and interest owed on debts owing to the Canada Revenue Agency.

Sounds too good to be true. Are there some disadvantages as well?

A consumer proposal will generally take longer to complete than a bankruptcy. By making a manageable fixed monthly payment through a consumer proposal, you make payments over a longer period of time (maximum 5 years).

A consumer proposal will be on your credit report for up to 3 years from the date you complete your proposal. Your credit rating will be an R7 upon completion.

You will be provided with two counselling sessions with our certified counsellors. Individuals often complete their consumer proposal faster than anticipated using the tools and skills acquired during the financial counselling. You will learn how to accelerate payments, build savings for future financial goals, and take control of your financial future.

We are also asked can a consumer proposal be rejected? The answer to this is that creditors accept most proposals as it helps both them and the consumer to resolve the debt.

The cost of administering your proposal is included in your single monthly payment.

Consumer proposal administrators have to be Licensed Insolvency Trustees, registered with the federal government under the Bankruptcy and Insolvency Act and, as such, fees paid to a trustee for administering a consumer proposal are set by legislation. Trustee fees are included in the payment you negotiate with your creditors. There are no additional fees, typically no up-front fees and no minimum fees. You do not make any payments until your consumer proposal is officially filed.

We are often asked is a consumer proposal worth it? The best way to find out is to talk to us. If you think a consumer proposal is the right solution for you, contact us at The Fryzuk Group. Only an LIT can act as a consumer proposal administrator