Consumer Proposals in Canada

A consumer proposal legislated way to negotiate a settlement with your creditors and is one of the best ways to avoid filing bankruptcy.

While not every propsal is identical, most proposals allow you to:

  • Reduce your monthly payments.
  • Repay a portion of your total debt.
  • Stop all interset from being charged.
  • Stop collections efforts, including wage garnishee’s and collection calls
  • Protect your house, your car or any other assets.

Example of  Consumer Proposal filed in Canada

Michael had $62,300.00 of consumer debt  owing on 3 credit cards, 1 peronal consolidation loan and 1 line of credit.  All of this debt was unsecured and was the result of overspending and an unexpected period of unemployment.  Before Michael filed a consumer proposal he was spending $1137.oo per month on debt repayment, this was roughly 43% of his total income and didn’t leave him enough room to pay his child support each month.

Michael filed a consumer proposal to his creditors.  In this proposal Michael offered to pay his creditors a total of $17,000.00 over 48 months.  All of the creditors were happy with this offer, the proposal was accepted without issue and Michael has been happily been paying $354.17 each month, is current with his child support and next year will be finished his proposal and completely out of debt.

Who can make a consumer proposal?

To be eligible to file a consumer proposal you must:

  • Be a resident in Canada, or have resided in Canada within the last 12  months;
  • Owes greater than $1,000.00; and
  • Have debts that are less than $250,000 (excluding the mortgage on your principle residence).

As you can see the requirements are very simple to meet, but that doesn’t mean that everyone in Canda who owe’s greater than $1,000 should consider the filing of a proposal.  Practically we find that for a proposal to make sense you need:

  • To owe greater than $10,000,
  • Have relatively stable income, and
  • have sufficient room in your budget to make a reasonable payment to your creditors.

As a result it is important that when you are conisering making a proposal to try and deal with your debt that you consult with a local proposal administrator and they will help you to determine if a consumer proposal will work in your situaiton and what type of offer will have to be made to your creditors.

Does it cost anything to make a consumer proposal?

There is a cost to filing a consumer proposal. This cost is regulated by the Federal Government and comes out of the offer you make to the creditors. So likely in the example above, just like Michael, you pay the amount proposed and accepted by the creditors, nothing more.

Further Information

Our professionals are licensed by the Federal Goverment to administer consumer proposals in Canada and offer free consultations to anyone considering filing a consumer proposal.

This free cosultaiton is designed to first assess your situation, second determine what would need to be offered to your creditors and third to answer all your questions about the filing of a consumer proposal and explain any other options that exist.

To arrange for your consultation, you can contact a local proposal administrator in your area or fill out our online evaluation and a proposal administrator will contact you directly.