What does it cost to file a consumer proposal in Cambridge?

So what does it cost to file a consumer proposal here in Cambridge?

The simple answer is that a consumer proposal will cost you more than a bankruptcy in Cambridge, because we must offer more to the creditors than they would get in a bankruptcy in order to get them to accept the proposal.

In a bankruptcy you are required to make payments each month based on your income (the more you make, the more you are required to pay). Also, if you own a house that is not fully mortgaged, you would probably lose it if you went bankrupt.

For example, if your bankruptcy payments would be $200 per month for nine months (based on your income), and you have $5,000 in equity in your house (the difference between the house value and the amount owing on the mortgage), and you have a non-locked in RRSP worth $3,000, the total amount you would pay, or lose, during your bankruptcy would be $9,800.

It may be possible to offer the creditors a proposal where you pay $300 per month for 60 months, or $18,000 in total. Since the $18,000 the creditors will receive in the proposal is larger than the $9,800 they may expect to receive in a bankruptcy, it is likely the creditors will accept the proposal. It’s a good deal for the creditors, because they get more, but it’s also a good deal for you, because you know exactly what you must pay each month, and you don’t lose your home or your RRSP.

To decide whether or not a consumer proposal is the right option for you, please call my Cambridge office at 519-622-3773 or 310-PLAN, or e-mail me a question and my staff will set up a meeting so that I can personally review your situation, and help you determine the cost of a proposal in your circumstances.