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Why a person making a consumer proposal should hire a representative

Over the past decade consumer proposals have become an increasingly popular debt elimination strategy for Canadians.  In 2015 about 58,000 Canadians chose to deal with their debt situation by making a consumer proposal.

Under a consumer proposal an individual will repay anywhere between 20 and 40 percent of his unsecured debt by making instalment payments over a period not to exceed five years.  A relatively small percentage of these people hired someone to represent them when making a consumer proposal.  In many instances these represented individuals obtained much better results than those unrepresented individuals.

A bankruptcy trustee’s role does not include getting the best deal for a consumer

Consumer proposals can only be filed on behalf of an individual by a licensed insolvency trustee (LITs), formerly called bankruptcy trustees.  Licensed insolvency trustees, however, do not “represent” individuals making a consumer proposal nor do they have an obligation to assist a person obtain the optimal result when making a consumer proposal.  In fact, under federal law a licensed insolvency trustee has a duty to not only the individual’s creditors as well as the Superintendent of Bankruptcy.

LIT’s financial interests may be diametrically opposed to that of person making a consumer proposal

In addition to a one-time $1,500.00 preparation fee, LITs are entitled to receive an amount equal to 20 percent of the monies distributed to creditors under a consumer proposal. Therefore, it is in the LIT’s financial best interests for the total debt included in a consumer proposal to be valued as high as possible.  Conversely, it is in the best interests of the consumer for the total debt included in a consumer proposal to be as low as possible.  Accordingly, one should not expect an LIT to be motivated to be zealous when it comes to seeking lower appraisals for the valuation of assets to be included in a consumer proposal.

CDPCL has a proven track record representing Canadians making a consumer proposal

Woodbridge, Ontario-based Consumer Debtor Protection of Canada Ltd. (CDPCL) has a proven track record representing Canadians making a consumer proposal.  Since 2004 CDPCL has assisted tens of thousands of Canadians obtain a favourable result when doing a consumer proposal.  The company has an A+ rating with the Better Business Bureau.

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