How Much Does a Consumer Proposal Cost?
You will be surprised to learn that settling your debts with a consumer proposal will likely cost significantly less than what you would otherwise have to pay your creditors!
One of the first questions we often hear is “how much does a consumer proposal cost?”. A lot of this confusion is due to the emergence of unregulated, non-professionally designated, debt consulting companies that charge a fee to refer individuals to a Licensed Insolvency Trustee and Proposal Administrator. Many of these companies require payment of an upfront fee before providing the referral.
If you speak directly to us, without an intermediary, you will not be required to pay a referral fee. Nor will you be required to pay us a significant upfront or initial fee to commence the consumer proposal process.
A consumer proposal is an agreement reached between you and your unsecured creditors which requires you to pay an agreed upon sum of money to completely settle and pay your unsecured debts. The total amount to be paid is primarily determined by your net monthly income and the equity in your assets, not the amounts payable per the loan, credit card agreement or collection agent The consumer proposal represents a sum of money that the majority of your unsecured creditors, in dollar terms, have agreed to accept in full settlement and payment of your unsecured debts. Once accepted, you typically make a single, affordable, monthly payment to your Licensed Insolvency Trustee and Proposal Administrator for, on average, 4 to 5 years to pay the total sum agreed to. Of note, the consumer proposal can be paid in full at any time.
The Licensed Insolvency Trustee’s fees and disbursements, and the taxes it must remit, are paid in accordance with a formula prescribed in the consumer proposal legislation. All Licensed Insolvency Trustees are paid according to this formula. Payment amounts are not negotiable. The amounts paid are primarily a function of the amount paid to the Trustee to settle the consumer proposal – the more that is paid to the Trustee, the greater the fee. Typically, just over 20% of the total sum paid to the Trustee on account of the consumer proposal obligation is paid to it for its fees.
The fees and disbursements paid to the Trustee, and the taxes it must remit to the government, are paid out of the total amount you are required to pay to it to satisfy your consumer proposal. You do not pay an additional sum to the Trustee for its fees and disbursements, nor for the taxes that must be remitted to the government. The creditors absorb the cost of the consumer proposal.
If you speak directly to us, a Licensed Insolvency Trustee and Proposal Administrator, the only cost to you will be the affordable payments that you will make to us on account of the agreed upon consumer proposal obligation.
For a free initial consultation with one of our firm’s experienced professionals, and to explore if a consumer proposal is best suited for you, please contact us today!
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