A consumer proposal that has been accepted by your creditors can help reduce your financial burden.
Your first step is to seek advice from one of our financial specialists at Morataya Corp. Debt Solutions. We are a Licensed Insolvency Trustee and we can help you by reviewing your current debt situation and carefully evaluating your options. In order to stop your debt from growing, a consumer proposal may be your best option as long as you are eligible.
A Consumer Proposal – How Does It Work?
To file a consumer proposal you must owe $250,000 or less to your creditors, (not including your mortgage of principal residence), and you must be unable to pay your debts in full. If the amount is over $250,000 a DIV1 proposal would then apply.
At Morataya Debt Solutions, we’ll go over your debt situation with you and give you the best professional advice regarding a proposal. We will guide you through the process from beginning to end.
By law, your creditors have 45 days to consider whether to accept, re-negotiate or reject your proposal. In order to be accepted, creditors representing a majority of the dollar value of your debt must accept the offer. This is also known as a simple majority. If your total debt is $30,000, for example, creditors representing $15,001 of your debts must approve the proposal.
Only One Monthly Payment to All of Your Creditors!
There will be only 1 monthly payment that must be made once a month. This will be divided amongst all of your creditors. At the same time, you must continue to make payments to your secured creditors, (mortgage, car loan, etc.), as usual.
At Morataya Debt Solutions, we do not want you to suffer from financial hardship again. During the process we will show you how to budget and to live within your means. You’ll also learn how to save your money and protect your savings from any unexpected events.
If the proposal is rejected we will contact your creditors to renegotiate new terms. In many cases increasing your payment by a small amount per month may be enough to get your creditors to accept the proposal. You also have the option of filing bankruptcy protection. You’ll have the upper hand here, however, since your creditors will know that if they don’t accept your proposal you may file bankruptcy. This encourages creditors to accept reasonable settlements.
Once a proposal is accepted it is totally flexible and it can be paid off faster if possible. As soon as you make the last payment, you will be given a certificate of full performance and all of the unsecured debts included in your proposal will be erased.
If you fail to keep the terms of your proposal, such as missing 3 monthly payments, the proposal may be annulled. Your creditors would have a claim against you for the amount owed to them before the proposal was made minus any amount paid to them during the time when the proposal was active.
Each situation is different and we strongly recommend that you contact us to review your situation. We can help you calculate the terms of a consumer proposal based on your specific circumstances.
Your credit rating while your proposal remains active and for 3 years after making the last payment will be an R7. An R1 rating is the best while an R9 is the worst.
Debts Included in a Consumer Proposal
- Credit cards
- Lines of credit
- Personal loans
- Payday loans
- Income taxes
- Bank overdrafts
Secured creditors are notified if you file a consumer proposal, but they do not receive any money from the actual proposal. If you file a proposal you can choose to either continue paying your secured creditors and keep the assets or stop paying them and the assets will be returned. Any difference owing to the secured creditor can be included in the proposal.