Eliminating debt for less: Income reported under a consumer proposal
Licensed insolvency trustees (LITs), formerly known as bankruptcy trustees, are the only persons entitled to file consumer proposals on behalf of consumers. LITs, however, do not–and legally cannot–act as a consumer’s advocate or legal representative. In fact, a consumer’s best interests are often diametrically opposed to that of the LIT filing a consumer proposal on their behalf. The greater the amount of monies a consumer pays under a consumer proposal the higher the LITs compensation.
Consumers seeking to eliminate their debt by making a consumer proposal have the right to representation. Consumer Debtor Protection of Canada Ltd. (CDPCL) has been representing Canadians making consumer proposals since 2004. We are the largest consumer proposal representation firm in Canada. Our firm has a wealth of experience helping Canadians obtain favourable results when making a consumer proposal.
We are very familiar with the many potential pitfalls facing an individual making a consumer proposal. One scenario where a consumer making a consumer proposal has to be very careful is where they live with others who have income. It is common for LITs to include 100 percent of household income in their calculations when making a proposal to a consumer’s creditors. This will typically result in a consumer paying substantially more under a consumer proposal than they ought to.
When clients do their initial consultation with us, our experienced debt consultants review their financial situation very diligently and educate clients on their rights in a consumer proposal. As an illustrated example, we had a client who was making only $900 through pension and his wife was still working and making more than $2,000 every month. If this client would have directly gone to a bankruptcy trustee they would have considered the entire household income which would result in a surplus income and higher payments. Our debt consultants are very comprehensive in their calculations and try to work in the best interest of our clients and offer them what they are eligible for.
At CDPCL we know what income should be included and what should be excluded when a consumer is making a consumer proposal. Our sole responsibility is to obtain the most favourable result for our clients. Unlike LITs, we do not receive additional compensation because 100 percent of household income is included when making a consumer proposal.