Effects of Filing a Consumer Proposal in Ontario

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If I file a consumer proposal, will my wages be garnished?

No. In fact, a consumer proposal in Ontario prevents your creditors from garnishing your wages and protects your income to ensure a reasonable standard of living and an orderly retirement of your debt.

If my wages were garnished by a creditor before I file my consumer proposal, will my employer be informed of my consumer proposal?

Your employer was already contacted by your creditor by way of a garnishment order. In order to stop this wage garnishment, we have to notify your employer in writing of your filing of a consumer proposal otherwise your employer could be held liable for not enforcing the Garnishment Order of the Court. To avoid this, consider filing a consumer proposal before one of your creditors garnishes your wages.

What happens if I cannot meet the payment terms of my consumer proposal?

If you are in default with the payment terms of your consumer proposal, your consumer proposal will be annulled and your creditors can resume their legal collection actions.

How would a consumer proposal in Ontario affect my HST refunds and my tax refund?

Tax refunds are not affected unless specifically stipulated in the a consumer proposal and will continue to be sent to you by the government.

If I file a consumer proposal, do I have to continue paying off my student loan?

If you finished school more than seven years ago, you will not have to pay off your student loan because it becomes a dischargeable debt upon the completion of your consumer proposal. Otherwise you will have to continue paying off your loan.

Do I have to pay my income tax debt if I file a consumer proposal?

Income taxes owed before the date of filing the consumer proposal can be included and are almost always dischargeable, therefore you will not have to pay income tax debt prior to the filing of the proposal if the proposal is accepted by the creditors.

What happens to my assets in a consumer proposal?

You retain control of your assets in a consumer proposal unless there is a specific provision(s) in the consumer proposal stipulating otherwise.

What happens when the consumer proposal is completed?

When you have completed your obligations under the terms of the consumer proposal, you will receive a Certificate of Full Performance from the Administrator of your consumer proposal. You are then relieved of any further obligation to pay the unsecured creditors that had been notified of your filing a consumer proposal.

After completing my consumer proposal, how long will my credit score be affected?

It varies by credit agency. In general, your credit score will be affected for 3 years after you have completed the terms in your consumer proposal. You may be able to rebuild your credit earlier, though.

Our experts can show you how to fix your credit. See Rebuilding your Credit.

These answers to frequently asked questions are provided as general information only. Each individual’s situation is unique. To speak to someone now call us at 1.800.665.9965 for a free, no-obligation, confidential consultation.
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