Help With a Consumer Proposal

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The Consumer Proposal

A consumer proposal is an important tool available for those who have creditors who are seeking to collect on debts. At its most basic, a consumer proposal allows you to make an offer to creditors to pay off your debt, but with more favorable and reasonable terms for you. If you want to reduce your interest payments, reduce what you owe, or extend the time you have to pay off debts, here is the information you need to know about consumer proposals.

Is A Consumer Proposal Right For You?

Consumer proposals aren’t appropriate for everyone. If you owe less than $1,000 or more than $250,000, you are likely not eligible for a consumer proposal. However, there are certain debt exclusions, such as mortgage debt, that don’t count towards these thresholds. Speaking with an experienced licensed insolvency trustee can help you better understand if a consumer proposal fits your needs.

What Is A Consumer Proposal?

A consumer proposal is considered a formal offer to your creditors. You want to pay off your debt, but you need your creditors to help you before the debt grows unmanageable.

A licensed insolvency trustee will examine your financial situation and offer your creditors your proposal. This proposal may request the creditors to extend how much time you have to pay off the debt or offer them only a certain percentage of the debts owed. You may also request to reduce interest payments. Sometimes a proposal will request all of these actions be taken.

All payments to your creditors will occur through the licensed insolvency trustee, who will act as an intermediary. The trustee will then use this money to pay off what you owe.

consumer proposal

Other Benefits of A Consumer Proposal

insolency trustee shoping a financial planning to a couple considering bankruptcy in Canada

Stop Wage Garnishment & Lawsuits

Once you file a consumer proposal, your wages will stop being garnished and any lawsuits against you by creditors will halt. You will also likely be able to keep your assets under the terms of a consumer proposal.

Creditors Are Under No Obligation To Accept Your Terms

It’s important to realize that creditors can reject or accept your proposal, and they have no legal obligation to negotiate the terms of your debt. However, they often have an incentive to work with you to recoup the money they are owed. Creditors have 45 days to accept or reject your proposal, otherwise, it will automatically be accepted.

If your proposal is rejected, you have the right to resubmit a new proposal. If this second proposal is rejected, you may have to file for bankruptcy if you cannot reach an agreement with your creditors.

Contact our office for more detailed information about this process and your situation.

Your Obligations Under The Proposal

If your consumer proposal is accepted, it is legally binding. You must either pay a lump sum or periodic payments. However, certain factors can lead to your proposal being annulled, such as missing three payments. Its important to work with your licensed insolvency trustee to ensure you make the required payments under the proposal. If you successfully pay off your creditors under the terms of the proposal, you will be released from your debt obligations.

Walk You Through Each Step of the Process

You will also be obligated to attend two government mandated financial counselling sessions and potentially attend meetings with your creditors. However, its important to know that as an experienced licensed insolvency trustee Dana MacRae will walk you through each step of the process of a consumer proposal 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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