The Consumer Proposal Process

The Consumer Proposal Process – How Does a Consumer Proposal Work?

A consumer proposal is a legal avenue available to Canadians, just like you, who are experiencing financial difficulties.

You may find yourself unable to repay all of your outstanding debt, but can still afford to repay a portion of what you owe. In this case, a consumer proposal may be a solution to help you get out of debt and start anew.

A licenced proposal administrator 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 on:

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 administrator 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.

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.

In 2015 almost 60,000 Canadians filed a consumer proposal.

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.

How does a consumer proposal work? To learn more about the proposal process and how it would affect you, we suggest you contact a Licensed Insolvency Trustee for a free, confidential consultation.  These consultations are confidential and take 30 minutes or less.  There is no risk in trying.

For your convenience, we have prepared a list of recommended Licensed Insolvency Trustees.