What is a consumer proposal in Alberta?

_{consumer proposal, Alberta debt relief, British Columbia}

In Alberta, a consumer proposal lets you negotiate with creditors to pay less than what you owe, managed by a Licensed Insolvency Trustee. With unsecured debts under $250,000 and if your payments are unmanageable, you get a repayment plan up to five years to ease your debt burden.

Show Table of Contents

_{Alberta consumer proposal: a path to effective debt relief.}

Consumer Proposal Question

What is a consumer proposal in Alberta? I’m interested in the specifics of how consumer proposals work in Alberta and if they differ from other provinces.

From: Anonymous Question
Location: Nanaimo, British Columbia (BC)
Category: consumer proposal

Consumer Proposal Answer

In Alberta, a consumer proposal is like making a deal with your creditors to pay off less than what you owe. It’s a formal plan that lets you tackle your debts without all the pressure, and it’s handled by a Licensed Insolvency Trustee (LIT). They’ll help walk you through your options and get your paperwork sorted. To qualify, your unsecured debts need to be under $250,000, and you’ll need to prove that making your current payments just isn’t doable. This proposal usually gives you a repayment plan stretching up to five years—a manageable path to lighten your debt load and get back on track financially.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

A consumer proposal in Alberta is a formal debt relief option available to individuals who are unable to pay their debts. It allows debtors to negotiate a repayment plan with creditors, typically reducing the total debt owed. The process is governed by the Bankruptcy and Insolvency Act (RSC 1985, c 11), which outlines how proposals can be made (sections 66.1-66.37). Proposals must be filed with a licensed insolvency trustee, who helps to prepare and administer the proposal.

In Alberta, consumer proposals are similar to those in other provinces since they are ultimately regulated by federal legislation. However, certain provincial regulations may affect the administration and approval processes. For example, the proposal must be accepted by the required majority of creditors (at least 50% of the total debt value) and must be completed within a maximum of five years, as specified in subsection 66.4(1) of the Bankruptcy and Insolvency Act.

Specific local practices or additional provincial requirements can sometimes influence the processing of proposals, yet the core framework remains consistent across Canada. The relevant regulations are detailed in the Bankruptcy and Insolvency Regulations and the related legislative acts, which ensure that consumer proposals are a viable and structured option for debt relief in Alberta and across the country.

From: OSB Helper

Related Questions to Alberta Debt Relief

Here are the top 5 most frequently asked questions related to “What is a consumer proposal in Alberta?” based on common queries and concerns:

1. What is a consumer proposal?

A consumer proposal is a legally binding agreement between you and your creditors to repay a portion of your debt over time, administered by a Licensed Insolvency Trustee[1][2][4].

2. How does a consumer proposal work?

A consumer proposal involves preparing and filing documents, including a Statement of Affairs and a repayment plan, which must be accepted by creditors representing at least 50% of your overall debt[4].

3. What are the eligibility criteria for a consumer proposal?

To be eligible, you must be unable to make your debt repayments, owe less than $250,000 (excluding secured debts), and have insufficient assets to settle your debt[1][2][5].

4. How long does a consumer proposal stay on my credit record?

A consumer proposal stays on your credit record for three years after you complete the payments[2][5].

5. What are the differences between a consumer proposal and bankruptcy?

A consumer proposal allows you to keep more assets, has less impact on your credit score, and involves fixed payments over up to five years, whereas bankruptcy involves surrendering assets and can stay on your record for six years[2][5].

If you have a question about debt see our debt questions or ask your own debt related question.

References

_{Table of article references}