Consumer Proposal

Repay a portion of what you owe without the impact of bankruptcy

A consumer proposal is a viable restructuring option for over 45,000 Canadians a year. It allows the consumer to seek legal protection from their creditors under a Federal Statute (Bankruptcy and Insolvency Act) whereby a debtor usually only repays a portion of what they owe.

Read our guide to consumer proposals and debt consolidation

Highlights

  • Pay back a percentage of what you owe without interest or penalty
  • The repayment period is up to 60 months
  • The repayment amount is based on your budget and ability to pay

Consumer Proposal Benefits

  • Most wage garnishments cease immediately
  • Interest stops accumulating from the day the consumer proposal is filed
  • Collection agencies and creditors can no longer contact you
  • Consumer proposals do less damage on your credit bureau than a bankruptcy by reporting an R7 instead of an R9 and it is easier and quicker to start rebuilding your credit

Through this process a debtor is required to give "full disclosure" of all their assets, liabilities, income and expenses as well as business interest as part of the process.

Additional Information

  • You must be insolvent to file a consumer proposal (debts are more than assets)
  • Your creditors are required to vote on the consumer proposal
  • A consumer proposal is an alternative to Bankruptcy
  • You cannot pick and choose the debts that are included (all debts must be included)
  • You cannot eliminate support or alimony allegations
  • You cannot eliminate student loans under 7 years old
  • You cannot include secured debts such as mortgage and car loans
  • You are allowed to keep assets based on Provincial legislation

4 Pillars represents the debtor to structure the payment terms of a consumer proposal which is filed by a bankruptcy trustee.

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