Yes, this is possible and very common. This usually happens when a married couple or just together, who has his finances together, files a consumer proposal together. A joint consumer proposal is not as easy to understand as you think. The two people who wish to file a joint consumer proposal must have “all or almost all” the same debts. This is not really clear and the joint consumer proposals are approved depending on the situation. Thus, it makes sense to approve the joint consumer proposal of two people who have a lot of debt together and the process will be initiated.
Who can file a joint consumer proposal?
Filing a joint consumer proposal in Canada is similar to filing a regular proposal, but you must do it with someone with whom you have common debts. You must still meet the requirements and scales of a regular consumer proposal. As mentioned above, the definition of having “all or almost all” the same debts as another person is vague but in general, most trustees will not allow you to file a joint consumer proposal if you do not do not share at least 90% that must be covered in the proposal. In addition, if you want to combine a proposal, it must be “sensible”. See it this way: it would be foolish to file a joint consumer proposal with your neighbor, but to do it with your partner would be. Here are some situations where it is “sensible” to conjoin a consumer proposal:
- A legally married couple. It makes sense for them to file a consumer proposal together because their debts have been accumulated together. In addition, if you file a joint proposal rather than 2 separately, you will only have to pay the administrative fee once.
- Parents and children. Parents and their children often have interconnected finances. Their debts too. It makes sense that they file a joint consumer proposal.
- Business partners. Submit a joint consumer proposal with your business partner is possible. However, since you surely have credit and loans to each of your names, there is a condition. Your proposal will surely not be accepted if one of you already has a lot of personal debts. The reason is that the majority of your debts must be common debts.
Advantages and disadvantages
There are of course advantages and disadvantages when filing a joint consumer proposal. If you think about it, you must know all the facets of such an action and determine if this is your best option.
Filing together increases the maximum amount of your allowed debts from $ 200,000 to $ 500,000.
A joint proposal is technically less expensive. You will have to pay the administration fee only once. This means that your income will be able to repay a larger amount of debt.
Both people are responsible for the payments equally. If one of the people is no longer able to make the payments or simply stops making them, the other person becomes responsible for those payments. Depending on the relationship you have with the other person with whom you have the proposal, this is an important point to clarify.
- If you stop making the payments, your consumer proposal will be canceled.
- A specific amount will be defined in advance in your proposal. The two people involved must agree among themselves how this amount will be separated, the trustee will not make this decision for you.
The joint consumer proposal: when?
Consumer proposals, joint or simple, are there to meet a specific need: when your debts have become too heavy to bear and your income is not enough to cover them. A consumer proposal is less drastically bankrupt but it is still a serious financial decision and all your options should be finely evaluated before making your final choice.
A joint consumer proposal is, in most cases, ideal when someone has the opportunity to include double the amount of debt accepted in a regular proposal. Since a consumer proposal helps people who have serious financial problems, they are used to using the maximum limit available to end their debts.
In the case of large financial decisions, we recommend that you always talk to a professional who can help you make the right choices.
The faster you go, the sooner you will find yourself without debts. One of our debt management consultants can give you more information and help you with your decisions.