Consumer Proposal: A Real Life Example

Scott Schaefer, Bankruptcy Trustee, Consumer Proposal Administrator

Scott Schaefer, Bankruptcy Trustee, Consumer Proposal Administrator

This week we have discussed the advantages of a consumer proposal.  Today we present a real life example, courtesy of Scott Schaefer, CA, Bankruptcy Trustee and Consumer Proposal Administrator in Kitchener, Ontario.  You can read the full story in his article on What is a Consumer Proposal? for more information.  Here’s the example:

  • Joe and Jane (not their real names) were married five years ago,
  • They have two children together,
  • They purchased their house three years ago,
  • Joe works in construction so experiences some seasonal swing in his income,
  • Jane works for one of the large insurance companies and has steady income,
  • Joe was married once before and pays child support for one child,
  • They now have day care costs of $800/month,
  • Over the years, Joe and Jane have accumulated debt of $60,000 including lines of credits, credit cards and overdrafts.

After reviewing the options, they offered a consumer proposal that offers $30,000 to their creditors payable through monthly payments of $500 for 60 months. (They did not want to file for personal bankruptcy because they did not want to lose their house or worry about the surplus income trap in a bankruptcy in Canada, and they wanted to pay back as much of their debt as they could).

For Joe and Jane a consumer proposal was the right option.  To find out what’s right for you, try our free, 10 second, debt options calculator.

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