Consumer Proposal is a legally binding agreement regulated by the Office of the Superintendent of Bankruptcy. If you have financial challenges, you have the right to ask for your debt reduction.

Are you no longer able to repay all of your debts? A Licensed Insolvency Trustee can reduce them to a fraction of what you owe, often between 30 and 70%, by negotiating on your behalf with your creditors.

The consumer proposal protects you from your creditors. It prevents them from taking legal action, garnishing your paycheck and even calling you.

What type of Debt include in a Consumer Proposal?

Most of the debts that are unsecured, such as:
• Credit card debt (and store credit cards)
• Bank loans
• Quick money loans
• Tax debts
• Medical bills
• Student loans, if you have been studying for more than 7 years

Secured debts, such as a mortgage or a car loan, cannot be included in the consumer proposal. A secured debt is a debt secured by property.

The consumer proposal does not include secured debts such as a mortgage or a car loan. It differs from these financial commitments.

As long as you are able to pay off your mortgage or car loan during the term of your consumer proposal, you can keep these assets. Very often, the consumer proposal helps facilitate repayments because your financial situation is in better control.

Eligibility Conditions

To be eligible to file a consumer proposal, you must meet a few criteria:
• You are insolvent, meaning your debts are worth more than your assets or you are unable to meet your financial obligations
• Your debts are such that you cannot pay them off in full. You can only reimburse part of it
• Your unsecured receivables exceed $ 5,000 but are below $ 250,000 (mortgage not included)
• You are a Canadian resident or have property in Canada.

Why is the Consumer proposal an Effective Strategy for Financial Recovery?

For many people who end up unable to repay their debts, the consumer proposal is an effective strategy for eliminating debt without losing any property.

Many people who are afraid of having to file for bankruptcy are often able to resolve their debt problems by submitting a consumer proposal.

Why is the Consumer Proposal a Popular alternative to Bankruptcy?

• You can keep your belongings (like your house or your car).
• You can spread your monthly payments over five years.

Will the Consumer Proposal Affect my Credit?

The consumer's proposal can immediately lift the debt burden and offer a path to better financial health. However, it will have a temporary effect on your credit rating.

Once your consumer proposal is filed by your Licensed Insolvency Trustee, your credit rating goes to R7, the second to last lowest rating used by agencies like TransUnion or Equifax. The consumer proposal is on your credit report for six years after your request or three years after you are released from the proposal, whichever comes first.

The consumer proposal affects your credit rating, but not forever. Your trustee can tell you about ways you can restore your credit during and after your consumer proposal.
Be aware that the consumer proposal generally frees up considerable financial resources that could help you both immediately and in the long term. This is an opportunity to air your budget so you can focus on achieving your financial goals.

Who can help me decide if the Consumer Proposal is right for me?

The Licensed Insolvency Trustee is the only person authorized to file a consumer proposal on your behalf.

They are the most qualified person to help you understand your financial situation and the possible strategies for you, from debt consolidation to bankruptcy with everything in between.

Your first meeting with the Licensed Insolvency Trustee is free. During the consultation, we will be able to fully assess your debts, explain each possible option and make recommendations on the best action to take.

This first consultation usually lasts about an hour and you are under no obligation to use our services.

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