Consumer Proposal
Repay a portion of what you owe without the impact of bankruptcy
File your consumer proposal through a Licensed Insolvency Trustee. It is a viable restructuring option for over 45,000 Canadians a year, allowing 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 interest-free.
Read our guide to consumer proposals and
debt consolidation
Highlights
- Payback 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 rating than a bankruptcy by reporting as a "7" instead
of a 9. So 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 obligations
- You cannot eliminate student loans under seven 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 works with the debtor to fully understand all options to deal with debt and how each option fits with their budget.