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.
• 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.

• 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

A consumer proposal is a formal, legally binding process that is administered by a Licensed Insolvency Trustee (LIT). In this process, the LIT will work with you to develop a “proposal”—an offer to pay creditors a percentage of what is owed to them, or extend the time you have to pay off the debts, or both. The term of a consumer proposal cannot exceed five years.For total debts which not exceed $250,000
(DVISION 1 PROPOSAL TOTAL DEBTS EXCEED $250,000)

The LIT will file the proposal with the Office of the Superintendent of Bankruptcy (OSB). Once your proposal is filed, you stop making payments directly to your unsecured creditors. In addition, if your creditors are collecting your salary (garnisheeing your wages) or have filed lawsuits against you, these actions are stopped. The LIT will submit the proposal to your creditors. The proposal will include a report on your personal situation and the causes of your financial difficulties. Creditors then have 45 days to either accept or reject the proposal. They can also do this either prior to or at the meeting of creditors, if one is held.

We will help you to develop a plan that will fit your needs and meet the expectation of your creditors. Many creditors recognize an effort to make arrangements, through a structured plan like a debt management program and may make concessions such as adjusting your interest rate, reduction in required payments, and debt settlement offers.