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Consumer Proposal Pros and Cons: Should I File One?

Consumer proposal winnipeg

What Are the Consumer Proposal Pros and Cons and Should I File One

The consumer proposal pros and cons are rather simple to enumerate; but whether you personally should file one very much depends.

What does it depend on? Your personal debt situation and how you wish to approach it.  

If you’re ready to be relieved of your debt burden and are able to work towards paying it back in part or in full, then a consumer proposal makes sense for you. 

That said, let’s dive into the consumer proposal pros and cons in more depth. When you come to Caplan Debt Solutions to file your consumer proposal some of the benefits or pros are – 

Advantages of a Consumer Proposal

A consumer proposal, when made with the help of an experienced Licensed Insolvency Trustee, can be an effective way to get out from under your debt. 

One of the main advantages is that we can construct your proposal in such a way that you incur:

    • no loss of assets
    • no surplus income payment requirements
    • no professional designation consequences
    • no additional fees on top of the proposal payments to creditors
  • no loss of your tax refunds

Among other benefits. 

If you own a house with a lot of equity built up in your home, you get to retain that equity. You will not lose your house in a consumer proposal.

Similarly if you own a vehicle and do not have a loan against that vehicle you will get to retain that vehicle if you file a consumer proposal.

If you are used to getting significant tax refunds on an annual basis, when you file a consumer proposal you will not lose those tax refunds.

Real estate brokers cannot maintain their brokers licenses if they file Assignments in Bankruptcy but do not face the same problem if they file a consumer proposal.

Chartered Professional Accountants cannot maintain their designations if they file Assignments in Bankruptcy but do not face the same restriction if a consumer proposal is filed.

You do not have to report your monthly income and expenses to the administrator in a consumer proposal.

You do not have to make payments to the administrator based on a predetermined standard in a consumer proposal. 

And critically, you get to have input into what will be an affordable monthly payment. Due to the flexible nature of consumer proposals in Manitoba, you can tailor the payment plan to fit into your budget and financial plan. 

As your Licensed Insolvency Trustee, I will personally take the time to review your finances and determine a path forward that allows you to reasonably and affordably meet your debt obligations. 

Disadvantages of a Consumer Proposal

So what are the disadvantages of a consumer proposal? 

A consumer proposal will affect your credit rating in much the same way as a bankruptcy even though it is not a bankruptcy.

Your creditors may not accept your consumer proposal and insist on a higher payment than you can afford.

Some debts cannot be discharged in a consumer proposal: fine and penalties of the court, alimony and maintenance, student loans if you finished your studies less than 7 years ago, etc.

Consumer proposals are generally lengthy processes.  A consumer proposal is most often a 60 month commitment.  Life is uncertain and if you experience a change of circumstances after 36 or 48 months which makes it impossible to complete your payments you will have paid for 36 or 48 months only to have to file bankruptcy after making all those payments. But with the right Licensed Insolvency Trustee supporting you through this process, you can ensure that your agreement is fair and that you should be able to meet payment obligations in the event of foreseeable changes in your financial situation. 

Work with an Experienced Licensed Insolvency Trustee on Your Consumer Proposal in Manitoba

Call us at Caplan Debt Solutions to learn more about the consumer proposal process.  We would be happy to help get you started on your journey to freedom from debt.

With over 25 years of experience helping people attain financial freedom, our team can help you overcome even the most seemingly insurmountable and unmanageable debt burdens. 

Get in touch today.