CONSUMER PROPOSAL

A different approach to debt management

A consumer proposal is a compromise between the debtor and their creditors on the repayment of debt.

The offer can include one or more of a variety of debt reduction compromises, for example, reduction or elimination of interest, extension of time, repayment of only a percentage of the debt. This can be an excellent debt management solution for many people.

You can ask an experienced licensed insolvency trustee at Golding & Associates if this is the right option for you!

Who exactly is eligible to file a consumer proposal?

Believe it or not, a consumer proposal can be filed by anyone who is insolvent, as long as the sum total of their debts do not exceed $250,000 (excluding a mortgage on the person’s main residence). If the debts are in fact more than $250,000, it is still possible to file a proposal, but it would be filed under Division 1 of the Bankruptcy and Insolvency Act. That is something your licensed insolvency trustee would provide additional information about.

A consumer proposal can only be filed by a licensed trustee or administrator. The first key step would be to contact a trustee/administrator to discuss your situation. If, after fully assessing your situation, you determine that a consumer proposal is the right solution for you, the administrator will have you sign the required forms and file them with the Official Receiver.

Do you have too much debt but don’t want to file for a bankruptcy? A consumer proposal may be a good solution for you.

A consumer proposal is a compromise between you and your creditors. A consumer proposal is not necessarily a “one size fits all” solution. We will discuss your individual situation and help you on the path towards finding a good compromise with your creditors based on what you can afford. A consumer proposal is a legal agreement between you and your creditors. Once it is accepted by the majority of your creditors, all of your unsecured creditors are bound to the terms of the proposal. Like in bankruptcy – there are a few exceptions to the types of unsecured debts – which we will discuss if they apply to your specific situation. 

Typically, filing a consumer proposal can save you money – you can compromise both the interest and the amount owing.

To find out more information, visit our FAQs about consumer proposals.

This calculator gives an illustration on how helpful a consumer proposal can be:

Total unsecured debt:
Consumer proposal:
Monthly -
X
Total -
X
Credit counselling:
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X
Total -
X
Debt consolidation:
Monthly -
X
Total -
X
Pay on your own:
Monthly -
X
Total -
X

See answers to commonly asked questions about proposals HERE.

Submitting a consumer proposal to your creditors