Consumer Proposals – The Solution For You?

Click here to view our Consumer Proposals video (1:35 min.).

Are you:

• Having trouble paying all your bills, even though you have a good job?
• Thinking about filing bankruptcy, but not really wanting to?
• Simply looking for more information about ways to deal with your debt?
  

What do you do?

If you find yourself in this situation month after month, a Consumer Proposal may just be what you’re looking for.

A Consumer Proposal is suitable if:

• You have debts over $5,000, but not over $250,000 (not including your home mortgage).
• You've got a good job, and can afford to make some payments each month.
• You just can not afford to repay everyone in full with interest.
• You can’t get a debt consolidation loan because your debts are too high, even with your steady job.
• You don’t want to go bankrupt, because:
  • With your income, you would be subject to surplus income penalties.
  • You don’t want to lose any of your assets, such as a valuable home or car.

Advantages of a consumer proposal

For you the consumer:

• You can negotiate to repay only a portion of the debt you owe.
• Interest stops accumulating at the date you file.
• All of your unsecured debts are included, except some limited categories (see below). Debts from credit cards, bank loans, payday loans, and income taxes are included.
• Maximum repayment period is five years.
• All collection activities by creditors (except for support and alimony) are immediately stopped, including wage garnishment.
• You don’t lose your house or any other assets.
• The effect on your credit rating is less severe than a bankruptcy.
• You meet a portion of your obligations to your creditors.

Why would your creditors accept a consumer proposal where they are getting less than the full amount they are owed? In most cases they don’t want you to go bankrupt. A proposal is better for them because even though they may not get all of their money, they are getting more than they would get in a bankruptcy.

What a consumer proposal won’t do for you

A consumer proposal will not:

• Allow you to pick and choose the debts to be included.
• Eliminate your support and alimony obligations.
• Eliminate your student loan obligations.
• Deal with your secured debts, such as your house mortgage and car loan. Your trustee can advise how to deal with these.

Where to go from here?

Go to Part 2: An explanation of consumer proposals.

Read Part 3: Questions about consumer proposals.

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.