Effects of Filing a Consumer Proposal in Ontario

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.

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.

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 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.

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.

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

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.

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.