You may have heard advertisements for companies who claim to be able to reduce your credit card bills by up to 70%. Good deal right? What they are referring to is arrangement called a consumer proposal. With a consumer proposal, your creditors allow you to repay a portion of your debts. They agree to the arrangement because they receive more money than if you had filed for personal bankruptcy. And it’s a good deal for you because you avoid the implications of bankruptcy like losing your house or paying surplus income.
To file a consumer proposal, you need to meet with a licensed trustee in bankruptcy. The trustee’s role is to assess your situation and help you understand the merits and consequences of your, including consumer proposals and personal bankruptcy.
If you choose to file a consumer proposal, a trustee is required to act as the administrator. So what’s the problem? The problem is that a lot of the people you hear advertising on the radio and online are not licensed trustees in bankruptcy. They are what I like to call “debt consultants”. What normally happens is that you have a meeting (or a phone conversation or exchange e-mails) and the consultant asks for an fee to get to work on your file. I’ve had people tell me that they were asked for anywhere between several hundred and several thousand dollars. The consultant’s “work” culminates with referring you to a licensed trustee to file a consumer proposal. If this has happened to you, you have been taken advantage of. That’s probably too polite.
The bottom line is that there is no need to see a debt consultant if you are interested in filing a consumer proposal. Contact us directly to book a free, no-obligation consultation and we can explain your options. No referral fee required.