Registered Consumer Proposal
A simple definition of a registered consumer proposal is, it’s an offer you make to financial institutions with the intent of paying off your debts. They may either approve or reject your offer, based on how they see the proposal. So where does this term ‘registered consumer proposal’ factor into things? The fact is, that any creditor who is dealing with your debt will have some way of checking your proposal. You might think that the creditors are just blind, but they’re actually not. All good companies employ staff that will check your proposals before they hand over any money to you. This is called credit checks, and it’s where these professionals will look over your proposal and see if there’s anything that could put your chances off. A creditor that has to constantly be wondering about any aspects of your proposal can cause problems, so it’s therefore important for you to make sure that any proposals you send them are as good as they come.
A creditors process during a registered consumer proposal
A creditor will also look at how long it will take you to pay off the debts you have. The amount of time varies, depending on the type of credit transaction you have applied for and the amount of debt you have. If you have debts of ten thousand dollars or more, you’ll have to show a minimum of three (3) years of completed credit history, from the date of application. In these circumstances, the creditor will also need to see your identity details, as well as details of your contact details. When it comes to your registered consumer proposals, the amount of debt you have can affect the amount you can expect to be offered. The higher the figure, the more likely it is that you’ll get a higher amount in return. However, if you have debts under ten thousand dollars, you’ll get a lower amount. The amount that creditors offer on these proposals is based on several factors, including the type of debt, your credit history and your income. The type of debt and the amount of debt will also vary between different creditors.
The first thing that the creditor will do when they receive your registered consumer proposal is to send you a request for an appraisal of your debt. This is used as a means of helping the creditors work out whether your debt should be considered for settlement or not. Although the creditors won’t tell you what kind of debt is eligible for debt settlement when they receive your proposal, they will usually have a list of debts that are eligible. This list will include unsecured loans, credit cards and store cards, unsecured personal loans and student loans, and secured debts such as car loans and mortgages. You’ll normally have to supply the creditor with your name, address and social security number in order to qualify for any of these debts, although there are instances where the creditors may require only your social security number.
If you agree to any of the debts being offered through the registered consumer proposal in Canada, the creditor will then issue a letter of authorization to the Canada Revenue Agency to allow collection of the amount owed. In many cases this will be done automatically by the Canada Revenue Agency, but in others you will have to fill out an application and wait up to ninety days for the letter to arrive in the mail. The Canada Revenue Agency will verify that the debt was requested on behalf of the debtor and will make sure that all applicable tax rules have been met. If all the necessary tax conditions are met, the agency will then take over the debt and try to collect the amount from you. In Canada, this process is called realization of the debt.