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Beware The 100% (or 120%) Consumer Proposal- GEM Debt Law

Beware The 100% (or 120%) Consumer Proposal | GEM Debt Law

Read Part 1: The Misunderstood Truths About Consumer Proposal And Trustees

Table of Contents
Do Trustees make more money from higher Consumer Proposals?
About GEM Debt Law
GEM’s fees for Debt Settlement
Why talk to GEM Debt Law, BEFORE you talk to a Trustee? 
What are Your Best Interests

Do Trustees make more money from higher Consumer Proposals?

Short Answer: Yes. FYI, we are not Licensed Insolvency Trustees.

About GEM Debt Law:

  • We are a very affordable Law Firm (more about our discount fees below);
  • We offer Debt Resolution services;
  • We Represent You, the indebted consumer, looking to Recover Financially – Fast;
  • We protect your best interests;
  • We protect you against creditors (banks, lenders, etc.);

Long answer: To recap from Part 1: The Misunderstood Truths About Consumer Proposal And Trustees, in a Consumer Proposal, Trustees earn a percentage of what you (the consumer) pay to creditors, i.e. banks, lenders, etc. So let’s say, in the Consumer Proposal, you are ordered to pay $1000 per month towards your unsecured debts. Basically, the Trustee pockets twenty percent (20%) of that amount you
pay every month, for nearly 5 years. Mathematically, the more you pay to creditors (banks, lenders, etc.), the more money the Trustee pockets.

Needless to say, if you must pay a greater amount each month; for example, $1500, then the Trustee’s twenty percent (20%) equals a great amount of compensation. Therefore, do you think every Trustee will push for the lowest payments and savings on your debts? Keep in mind, Trustees have a mandate to ensure creditors (banks, lenders, etc.) are made as whole and compensated as possible (more about that below).

Contrast with GEM’s fees for Debt Settlement: GEM earns more when you pay less to creditors (banks, lenders, etc.). That’s right, the way our fee structure works is to incentivize saving you money; that is, getting each creditor (bank, lender, etc.) to accept less money towards your debt. Creditors that we negotiate with, very often forgive interest accumulation and forgive big portions of the principal debt balance. After settling your debts and paying our invoice, you can still walk away saving thousands, even tens of thousands. It’s real and it happens every day at GEM Debt Law.

You don’t have to cut up credit cards – You keep them.

Your Credit Score increases, as we settle each debt. 

You can qualify for new lower interest loans, i.e. the mortgage for that dream home. 

A GEM representative would be happy to speak 1-on-1 with you and fully explain our client fee structure.

The Backstory: We often encounter consumers like yourself, who previously went to a Trustee to pay off debt and were presented with a Consumer Proposal at a rate of 100% to 120%. In other words, they must pay off their entire total debt, plus penalty interest. They did not think they had another choice. Their proposal would cost tens of thousands of dollars more, than if they utilized a debt resolution alternative, or were at least properly represented by someone who knows the ins and outs of insolvency proceedings. 

Remember, Trustees, do not represent You, the indebted consumer. Trustees have an equal obligation to their creditors. The pitch these consumers get from Trustees on 100% proposals, is that the penalty interest is frozen during the Consumer Proposal. Usually, consumers stress about high-interest rate accumulation, so the proposal seems enticing enough to sign. 

Of course, there’s little effort on the Trustee’s part to get creditors and lenders to agree to full payment of debts. Full payment is often unnecessary though, as creditors may accept much less through Debt Settlement. Debt Settlement can prevent you from struggling financially for many years. (And do not worry about the banks, the banks have made a lot of money from you over the years too).

Consumers too often are unaware there may be another way…

In fact, we have spoken with many Trustees in the past, who presented our client with Consumer Proposal terms that were far too high – far too expensive. If we were not there to intercede and reject the terms, our client might have ended up signing and struggling financially for years.

Why talk to GEM Debt Law, BEFORE you talk to a Trustee? 

Trustees licensed to administer Consumer Proposals, cannot possibly have the consumer’s best interests in mind. The Trustee should instead be seen as a facilitator, a mediator between the parties – with equal obligations to both sides. Let’s summarize.

Trustees get paid more in a Consumer Proposal, the more you must pay to your creditors.

Trustees have an equal obligation to creditors, i.e. banks, loan companies, etc.

Trustees must minimize creditors’ losses, which weighs against the consumer’s best interests. 

What are Your Best Interests:

  • Not paying accumulated interest and penalties; and
  • Only paying a smaller portion of the total debt; and
  • Simply paying less debt monthly, over less time; and
  • Improving your Credit Score; and
  • Not having to surrender ALL your credit cards for 5 years, which is mandatory in a Consumer Proposal (no exceptions);

Contact us for a free over-the-phone consultation. Our incentive is to save you as much money as possible and to protect only your interests.

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