Do I Qualify For Debt Relief? 

Consumer Proposal Eligibility: Do You Qualify?

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By Bromwich+Smith Staff | 710 words | Reading Time: 3minutes and 49 seconds| Date: 2023/01/24

With the final bills of 2022 coming in, how are you feeling when it comes to your financial health? Like so many Canadians, are you struggling to pay off credit cards in full, worried about the rise of groceries, fearful about what your new mortgage or rent payments will be when they come up for renewal? If so, you are not alone. Many individuals find themselves struggling and unsure where to turn for help. The feelings of guilt or shame can be overwhelming and cause additional stress. Bromwich+Smith is here to guide you and help you find debt relief.

Do you qualify for debt relief?

In order to qualify for a consumer proposal or bankruptcy there are two main qualifiers. First, you must be insolvent. Simply put you are unable to pay your debt. Second, you need to owe a minimum of $1,000 in debt which you are unable to pay. If you have the financial means to pay off your current debt but just require additional time, there are other options available including consolidation loans.

In Canada, there are several debt relief options including consumer proposals and bankruptcy. Meeting with a Debt Relief Specialist, like one at Bromwich+Smith will ensure you have all of the information needed to make an informed decision on which option works for you. We know that every situation is unique, and often what will work for one individual will not work for another. We know what your creditors are willing to settle for and can have those conversations with them directly on your behalf.

Even if you are eligible, a consumer proposal is typically best suited to those with money to pay their creditors monthly, and who own assets they don’t want to lose during bankruptcy. However, all of this can be discussed with your Licensed Insolvency Trustee in order to determine the best solution for conquering your debts. 

How do I know if I should consider debt relief options?

A consumer proposal is a legal process that allows individuals in Canada who are facing financial difficulties to negotiate a repayment plan for their debts with their creditors. However, not everyone is eligible for a consumer proposal, and certain requirements must be met in order to qualify.

  • You are unable to pay off your credit cards in full, or are carrying a balance of more than 50% of your overall credit.
  • You find yourself using Credit to pay for other bills.
  • You are starting to get phone calls, or letters from creditors with overdue payments.
  • You have had a life changing occurrence and have used up all of your savings and are still unable to catch up.
  • You see a deficit each month, and no matter what you do your income is less than your bills.
  • Have total debts less than $250,000 (excluding the mortgage on your principal residence). 
  • Have a stable source of income, to ensure that you will be able to make monthly payments.
  • Have no prior proposal proceedings that are still open.

Can I file a consumer proposal if I am bankrupt already?

Yes, this is possible, but you may want to consider this if your situation changes after declaring bankruptcy. Changing to a consumer proposal might reduce your monthly payment (by extending the repayment term) and therefore make the payments a bit more manageable. 

Bottom-line, only a Licensed Insolvency Trustee like Bromwich+Smith has the legal authority to administer a Consumer Proposal or Bankruptcy for you once eligibility has been determined. Many other businesses may offer debt relief programs like a Consumer Proposal. It is important to know that in Canada only a Licensed Insolvency Trustees is able to file this paperwork. If you are working with any other program ensure you ask if they are a Licensed Insolvency Trustee Before you sign.  If they are not, they will be required by law to engage an external Trustee, which could add unnecessary fees and time to the process. 

If you are facing overwhelming debt, remember that you are not alone. Bromwich+Smith has a number of debt relief strategies to help you regain control of your finances and get your life back on track. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1.855.884.9243, or request a call back at contact us page. 

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