Some residents in need of financial help in Edmonton are unaware they have more than one option for getting legal protection against creditors. Many believe the only way to stop a wage garnishment once it is in place is to declare personal bankruptcy in Edmonton.
As a result, they struggle on, often living in fear of answering the telephone and looking through their daily post. When the notice of a collection lawsuit finally arrives, they finally make contact with a licensed bankruptcy trustee for help.
We see Edmonton residents like that in our offices all the time. They are surprised to learn that they can get legal protection against creditors without bankruptcy, depending on their current income.
In the mid 1990’s, the Bankruptcy and Insolvency Act (BIA) of Canada was amended to include an insolvency alternative to bankruptcy called a consumer proposal. It is an ideal solution for debtors who have substantial assets and income that could be at risk in a traditional bankruptcy filing.
To learn how a proposal works and see whether you qualify for one, schedule a free initial consultation with any licensed bankruptcy trustee in Edmonton.
We will assess your financial condition to determine the best solution for dealing with your debts while at the same time affording you legal protection. In case you didn’t know, the debt settlement plans and credit counseling programs you see advertised on television do not legally protect you from creditor collection activity.
With a proposal, we will determine a single monthly payment you could afford to make over a period of five years, based on your income and family size. If your total unsecured debt is $250,000 or less and you have sufficient income, we can propose to your creditors they accept less than the total you currently owe.
Creditors are generally willing to accept a proposal if we can demonstrate they stand to regain more of what they are owed than they would should you file for personal bankruptcy in Edmonton.
Your unsecured creditors vote to accept or reject the proposal, and if a majority accept, the proposal becomes legally binding on all the creditors, not just those who voted to accept. The courts issue a stay of proceedings, informing your creditors to stop any collection activity underway against you, including wage garnishments and property lien attachments. What’s more, they are prohibited from contacting you in any way as you long as you are fulfilling the terms of the proposal.
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