Cambridge Consumer Proposal F.A.Q

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Frequently asked questions about Consumer Proposals in Cambridge

Consumer proposals are a top-rated and feasible debt relief solution in Cambridge. Like all other cities, a Licensed Insolvency Trustee (LIT) is the only individual qualified to file a consumer proposal in Cambridge. Make sure that you are dealing with a Licensed Insolvency Trustee (LIT), as there are parties out there claiming to do consumer proposals and demand a fee for gathering your data and then turning over your file to a Licensed Insolvency Trustee.  

If I file a consumer proposal in Cambridge, will I lose everything?

A: No, you will not lose everything. If you still owe secured debt like a mortgage or car payment, you must maintain those payments to keep those assets. A consumer proposal protects your assets from unsecured creditors.

What are the fees for a consumer proposal in Cambridge?

A: The Licensed Insolvency Trustee receives a single monthly payment that includes all fees in Cambridge. 

What are the debts involved in a consumer proposal?

A: A consumer proposal involves any unsecured debt. That is any debt that does not have the backing of a physical asset, like a mortgage or car loan. It consists of:- 

  • Credit Cards
  • Personal Loans
  • Payday Loans
  • Income Taxes
  • Lines of Credit

How does a consumer proposal affect my mortgage, car, and student loans?

A: Consumer proposals do not reduce mortgages or vehicle loans as these are secured debts with assets as collateral. If you cannot make those payments, the lender repossesses the asset for nonpayment. A student loan can be an inclusion if you have been out of school for more than seven years. If you file a consumer proposal for unsecured debt, you must resume making a mortgage, and the lender repossesses car loan payments or those items. If you can hold the payments on your mortgage and vehicles, the consumer proposal does not affect them. Your LIT at Cambridge works with you to design a budget to accommodate all the monthly payments.

What is the maximum duration of a consumer proposal in Cambridge?

A: A consumer proposal has a maximum duration of five years, but your financial circumstances determine its term.

What happens with my credit score when I file a consumer proposal in Cambridge?

Your credit score will be rated R7, which implies that you have made a settlement with your creditors. Upon completion of the proposal, the rating remains for three years.

What are the terms of a consumer proposal?

A: After the LIT negotiates with the creditors, you agree to repay the agreed-to portion of the debt in writing. It involves fixed monthly payments for a specified term, usually three and five years. You make the same payment to the LIT, who then distributes the appropriate amounts to the creditors.

If you file a consumer proposal for unsecured debt, you must continue to make the mortgage, and the lender will repossess car loan payments or those items. If you can maintain the payments on your mortgage and vehicles, the consumer proposal will not affect them. Your LIT works with you to create a budget to accommodate all the monthly payments.

Will my spouse be affected if I file a consumer proposal in Cambridge?

A: Your consumer proposal will only appear on your credit report. However, like in all other cities, if you have joint debts, your spouse could be responsible for the total debt after filing a consumer proposal in Cambridge. 

What about a co-signed loan?

A: The co-signer becomes solely responsible for the debt repayment unless you file a joint consumer proposal.

Will the wage garnishments stop?

A: Yes. After you file a consumer proposal, all legal actions end, including wage garnishments.

What about my credit cards when I file a consumer proposal?

A: To file a consumer proposal, you must submit all credit cards to your LIT. You cannot apply for a new card while making the consumer proposal payments, except for a prepaid or secured card.

Will the collection agency calls stop?

A: Yes. After you file a consumer proposal, the collection agencies can no longer contact you.

What happens if I cease making consumer proposal payments?

A: If you miss three payments, the consumer proposal becomes void, and you again are liable for all your debt.

What is the difference between a consumer proposal and bankruptcy?

A: A consumer proposal and bankruptcy give you a fresh financial start, but some differences exist.

  • A consumer proposal has a debt limit of $250,000, whereas bankruptcy has no debt limit.
  • With a consumer proposal, you pay a fixed amount each month to the LIT. But, bankruptcy payments vary depending on the “surplus income” each month.
  • With a consumer proposal, you have a chance to keep assets. Bankruptcy involves selling some of your assets to repay debts.

Contact our office for more detailed information about this process and your situation.

We can help you determine whether a consumer proposal is right for you

A Consumer Proposal is your Chance
for a Fresh Start.

Call for a free and confidential consultation at

1-800-665-9965

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