What Is The Debt Requirements For a Consumer Proposal?
There are minimum requirements for every debt relief option available to Canadians, to qualify they must all be met. This is true for every option applied for, from debt consolidation or debt settlement, to more severe options like consumer proposal or bankruptcy. When it comes to weighing the differences between consumer proposals and filing for bankruptcy, the amount of debt you have is a major requirement, without meeting this you would not qualify for one, or either of them.
The following links to consumer proposal guides will help provide more in-depth information about the specific guidelines and requirements for each territory or province. However, we will provide a requirement summary below this list to get you started. Knowing the requirements will help you decide which debt relief option is best for you.
Consumer Proposal Requirements by Province
- Yukon Consumer Proposal
- Saskatchewan Consumer Proposal
- Quebec Consumer Proposal
- PEI Consumer Proposal
- Ontario Consumer Proposal
- NWT Consumer Proposal
- Nunavut Consumer Proposal
- Nova Scotia Consumer Proposal
- Newfoundland Consumer Proposal
- New Brunswick Consumer Proposal
- Manitoba Consumer Proposal
- BC Consumer Proposal
- Alberta Consumer Proposal
Required Debt for Filing Consumer Proposal
When debt settlement is not an option, consumer proposals are the next best option, but just below bankruptcy. To qualify you must have over $1,000 in unsecured consumer debt. However, the maximum debt must be no more than $250,000 for a single person to qualify. The maximum debt allowed for married couples to qualify for a consumer proposal is $500,000, when filling jointly on income taxes.
Required Debt for Filing Bankruptcy
Bankruptcy in Canada is a program that helps individuals unable to pay minimum monthly payments get out of debt. Unlike a consumer proposal that is designed to help those that can afford minimum monthly payments, bankruptcy is for those that cannot make payments even with reduced debt, usually due to their net worth being much less than debt owed.
The amount of debt required for filing bankruptcy is at least $1,000 of unsecured consumer debt. However, unlike consumer proposals there is no maximum amount to qualify.
Required Debt for Filing Debt Settlement
To qualify for debt settlement, you typically need over $10,000 of unsecured consumer debt. When you have less than $10,000 in debt, it is usually recommended to go with credit counselling or debt consolidation, instead of creating a consumer proposal or filing for bankruptcy in Canada.
Additionally, just because you qualify for the bankruptcy or consumer proposal options, does not mean you have to, or should choose them over the others. It is best to consider other debt settlement methods because they will not harm your credit as much, and a debt settlement program can often provide improved terms with creditors. It will not impact your credit rating for many years, making it a preferred method when debtors are unable to pay their entire principal amount, but do not want to completely destroy their credit score.
Is a Consumer Proposal My Best Option?
Having a full understanding of your available options is crucial. To learn more about the best debt relief option for you, fill out our debt relief form today for a free consolation from an experienced adviser.