Having trouble paying all your bills? … What do you do? … A consumer proposal is suitable if … Advantages … What a consumer proposal won’t do for you …

Why is it called a consumer proposal? … Can’t I just leave a creditor out of the consumer proposal? … What if my creditors vote “no” … What does a proposal cost? …

The consumer proposal process in seven steps, from assessment to completion, and how it would affect you. Step 1: Assessment.

Financial and debt terms, legal references, proposal-related documents and events, with links to further details.

Part 2: Consumer proposals explained. For Parts 1 & 3 of our introduction to consumer proposals, see links at bottom of page. If you are new to the subject, we recommend reading all three in order.

What is a Consumer Proposal?

A consumer proposal is a legal procedure available to people living in Canada who are experiencing financial difficulties, but can still afford to repay a portion of their debts.

A licensed trustee will meet with you and work out a payment plan, and then present that plan to your creditors. If your proposal is accepted, it becomes a legally binding settlement of your unsecured debts.

For example:

You owe a total of $40,000, including amounts on four different credit cards and a bank loan.

In your consumer proposal, you may be making payments to the trustee of $400 per month for 50 months, for a total of $20,000. In this example your payments total only half of the total amount you owe.

The payments in a consumer proposal can be tailored to your personal needs. See examples of actual consumer proposals.

Repay “a portion of my debts” - it sounds too good to be true!

It is true, but remember: a consumer proposal is an alternative to filing bankruptcy. It’s not for everyone – it is only for people who are already in financial trouble. In order to file a consumer proposal, you have to prove that you are insolvent – if you are not insolvent, you are not eligible to file a consumer proposal.

So, what does “a portion of their debts” mean? Exactly what it sounds like. When you file a consumer proposal you offer to repay part of what you owe.

I never heard of a consumer proposal!

Don’t be surprised if you’ve never heard of consumer proposals before visiting this website. Historically, for every seven bankruptcies that are filed in Canada, only one consumer proposal has been filed, but those numbers are changing. More people are becoming aware of this option and deciding that it makes sense for them.

It is unlikely that the day will come when people no longer file personal bankruptcy, but consumer proposals provide a useful alternative to many people experiencing financial difficulties.

Tell me more about consumer proposals

Go to Part 3: Questions about consumer proposals.

Go back to Part 1: Is a consumer proposal right for you?.

To learn more about the proposal process and how it would affect you, follow our step-by-step guide, starting with step 1 – Assessment.

For a free consultation on whether a consumer proposal is right for you, contact a bankruptcy trustee near you.