Pros and Cons of Consumer Proposals

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What are the pros and cons of a consumer proposal

A consumer proposal in Ontario is a government-authorized settlement program for unsecured debt. Through it you negotiate with the creditors. It can save assets from liquidation, is an alternative to bankruptcy, and makes it easier to recover and rebuild credit.

Advantages of a consumer proposal

Instead of bankruptcy, you continue to make reduced payments until the debt is resolved.

Some of the more common reasons for the consumer proposal option are:

  • Reduction of unsecured debt by as much as 75%
  • Avoid bankruptcy
  • Consolidate debts into a single monthly payment of a fixed amount
  • Legally settle debts, including the Canada Revenue Agency (CRA)
  • Less damage to your credit rating
  • Earlier financial recovery

Disadvantages of a consumer proposal

Secured debt is excluded, so it may not help with the overall financial structure.

  • Credit rating will be affected by the debt write-offs
  • You will be considered a high-risk borrower
  • Student loans over seven years old are excluded

Alternatives to a consumer proposal

If you do not have a regular, stable income; have large secured debts; or are not solvent, there are other options to consider:

  • Bankruptcy
  • Debt consolidation
  • Debt counseling

Our office is also able to provide advice and counsel about these options. We will be happy to review your complete financial status and history and help you make the best decision possible under the current circumstances. Our discrete, non-judgmental staff are trained to look at all options and to discuss the possibilities.

These matters can be discussed over the telephone, video conference or in person. We are happy to set an appointment for you at your convenience without obligation or charge or you can book an appointment on our website.

alternatives for consumer proposals in ontario
We can help you determine whether a consumer proposal is right for you

A Consumer Proposal is your Chance
for a Fresh Start.

Call for a free and confidential consultation at


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