Consumer Proposal

You can settle your debts without the impact of Bankruptcy

If you are looking to settle your debts and avoid bankruptcy then a consumer proposal may be the answer for you.A consumer proposal is a viable restructuring option for more Canadians every year.  It allows the consumer to seek legal protection from their creditors under a Federal Statute (Bankruptcy and Insolvency Act) and settle their debts without resorting to bankruptcy.

Highlights

Pay back a percentage of what you owe without interest or penalty
The repayment period can be up to 60 months
The repayment amount is based on your budget and ability to pay
Consumer Proposal Benefits
Stops most wage garnishments
Stops  interest  accumulating from the day the consumer proposal is filed
Stops collection agencies and creditors from calling
Consumer proposals do less damage on your credit bureau than a bankruptcy by reporting an R7 instead of an R9.
A consumer is required to give full disclosure of all their assets, liabilities, income and expenses as well as business interest as part of the process.

Some Additional Things you need to Know.

You must be insolvent to file a consumer proposal (debts are more than assets)
Your creditors are required to vote on the consumer proposal.  Proposal must have a majority in dollar value voting in favor for the proposal to obtain creditor approval.
Consumers must attend 2 mandatory budget counselling sessions
You cannot pick and choose the debts that are included (all debts must be included)
You cannot eliminate support or alimony obligations
You cannot eliminate student loans under 7 years old
You cannot include secured debts such as mortgages or car loans
You are allowed to keep certain assets based on Provincial legislation

Frequency Ask Questions

Who can make a Consumer Proposal?
What are the major steps in a Consumer Proposal?
What happens if my circumstances change?
What happens with creditors and my credit rating?