Save Up to 80% of Your Debt

A Consumer Proposal is a formal legal process that can only be administered by a Licensed Insolvency Trustee (LIT). This process is regulated by the federal government. In a Consumer Proposal, you offer to pay your creditors a portion of what is owed to them either as a lump sum or via periodic payments. A Consumer Proposal may enable you to pay up to 70% less than you owe. Once you make the payments, you are legally released from all the debts included in the proposal.

A Consumer Proposal is a formal legal proceeding that protects you from your creditors and erases your debt. While protected, it allows you to negotiate a settlement with your creditors for less than you owe with the help of a Licensed Insolvency Trustee. The vast majority of our proposals are accepted without negotiation, however if the creditors are unhappy with your initial proposal they may ask for more money. If this happens your trustee will assist you in negotiating with them. Steve Welker and Company is successful in negotiating more than 99% of its Consumer Proposals.

A Consumer Proposal allows you to spread out your settlement over sixty (60) interest free monthly payments, but you can pay off your proposal as quickly as you like.

Your debt is consolidated into a single monthly interest free payment, and no money is required upfront..

A Consumer Proposal never affects your assets and protects you from your creditors so that you can focus on balancing your budget and completing your proposal.

1. Consultation: Becoming debt-free begins with a free, no-obligation initial consultation with a Licensed Insolvency Trustee. The Trustee will review your situation and explain your options.

2. Determine the offer: The Trustee will work with you to determine the amount you offer to your creditors and the amount of your proposed monthly payments.

3. Preparing and Filing: The Trustee will complete the necessary forms and file them with the federal government. Once they are filed, you benefit from a “stay of proceedings,” which means your creditors can no longer take legal action against you (such as wage garnishments) or pursue collection.

4. Notification: Your creditors will be notified of the proposal and have 45 days to vote on it.

5. Vote: If creditors who possess more than 50% of your proven debt approve your proposal, all creditors are bound by it, and the proposal moves forward.

• If creditors possessing more than 50% of your proven debt reject your proposal, the Trustee will help you negotiate. You never have to deal with your creditors directly.
• You are protected from collection efforts and legal action during the voting process.

6. Court Approval: Deemed Court approval is granted unless a creditor objects within 15 days after your proposal is accepted by your creditors. Creditors only object in rare cases. You will only be required to appear in court in the unlikely event that a creditor or the Office of the Superintendent of Bankruptcy has requested that the Proposal Administrator seek court approval.

7. Credit Counselling: You’ll attend two free credit counselling sessions with a licensed credit counsellor registered with Industry Canada. Steve Welker and Company employs accredited counsellors, so you won’t be referred to another organization or agency.

8. Make Proposal Payments: You’ll make payments to the Trustee as agreed-upon during your initial consultation. The Trustee will distribute those funds to your creditors once every 12 months.

9. Completion: You’ll receive a certificate of completion after making all payments to the Trustee and fulfilling your duties. You can then focus on rebuilding your credit and enjoying your new debt-free life.

10. Rebuild your credit: You can begin the process of rebuilding your credit rating after the proposal is complete. This is often done by obtaining a secured credit card that can be used to borrow responsibly and improve your credit history.

Each Consumer Proposal is different. Proposal payments can be stretched over as many as 60 months, and the payment schedule is fixed regardless of what you earn. You can pay off your proposal earlier if you can, and there is no penalty for doing so.

There is no charge for the initial consultation with the Licensed Insolvency Trustee, and there are no up-front fees for filing a proposal. Trustee fees are regulated by the federal government and included in the monthly Consumer Proposal payments. Trustees must charge fees as outlined in the General Rules of the federal Bankruptcy and Insolvency Act.

Both an assignment in Bankruptcy and Consumer Proposal are legal options to erase your debt.

Both processes must be administered by a Licensed Insolvency Trustee, and both processes are governed by the Bankruptcy and Insolvency Act (BIA). However, the processes have many differences.

In a Consumer Proposal, you offer to repay a percentage of what you owe and are legally released from the remaining debts included in the proposal once the process is complete. In a Bankruptcy, what you pay is based upon your income and assets.

• Consumer Proposal vs Bankruptcy: Your Assets
  • Those who file for Bankruptcy may lose certain assets. All non-exempt assets are either surrendered to the Trustee or repurchased by the bankrupt.
  • Filing a Consumer Proposal allows you to keep all your assets or belongings. You do not lose any assets.
• Consumer Proposal vs Bankruptcy: Your Income
  • If your income exceeds a certain level during the bankruptcy process, you must provide your creditors a portion. These are called “Surplus Income Payments.”
  • Surplus Income is not calculated in a Consumer Proposal. Your payment schedule is fixed regardless of what you earn.
• Consumer Proposal vs Bankruptcy: Length of Process
  • The bankruptcy process lasts between 9-36 months, depending on your income and whether or not you’ve filed for bankruptcy in the past.
  • A Consumer Proposal can last as long as five (5) years or sixty (60) months. A longer period results in the lowest monthly payment possible, but you can always pay off your proposal as soon as you’d like without any penalty.
• Consumer Proposal vs Bankruptcy: Creditor Approval
  • In a bankruptcy, approval by your creditors is not required. You are bankrupt after signing the papers, whether your creditors like it or not.
  • A Consumer Proposal will be accepted unless creditors representing 50% of the proven unsecured claims vote to reject it. If your initial proposal is rejected, you can work with the Trustee to amend it in hopes of changing your creditors’ minds. If your Consumer Proposal is rejected, you are not automatically deemed bankrupt. Steve Welker and Company is successful in negotiating proposals 99.9% of the time.
• Consumer Proposal vs Bankruptcy: Credit Rating
  • Declaring bankruptcy results in an R9 credit rating for 7 years after you complete the 9-21 month bankruptcy process as a first-time bankrupt. As a second-time bankrupt, it lasts for 14 years after completing the 24-36 month process.
  • A Consumer Proposal results in an R7 credit rating for 3 years after you complete your proposal.
• Consumer Proposal vs Bankruptcy: Cost
  • Fees for both processes are regulated and outlined in the federal Bankruptcy and Insolvency Act.
  • Our minimum fee for a bankruptcy is $1,800 or $200 x 9 months. Your payment in a bankruptcy will increase if you decide to keep non-exempt assets or if you earn surplus income.
  • As a rule of thumb, your payments in a Consumer Proposal will be 30% of your unsecured debt spread over 60 months, assuming that this amount is higher than your creditors would receive if you declared Bankruptcy. However, each proposal is unique. Proposal payments can vary significantly and must be high enough to earn the support of at least 50% of your creditors.
  • Your proposal payments do not change, no matter how much you earn. There are no “surplus income payments” with a Consumer Proposal, and you do not lose any assets.
• Consumer Proposal vs Bankruptcy: Income Tax and HST Refunds
  • If you file for Bankruptcy, income tax refunds generated in the year of your Bankruptcy or years before your Bankruptcy will be sent to the Trustee by the Canada Revenue Agency for the general benefit of your creditors. Refunds generated in tax years after the year of your Bankruptcy are not taken. HST refunds are also seized but are refunded if you make the required payments.
  • You keep all income tax and HST refunds when filing a Consumer Proposal.

If accepted, a Consumer Proposal allows you to pay a percentage of the debt you owe, either in monthly payments or in a lump sum. You could have your debt reduced by up to 70%.