A consumer proposal is a formal debt settlement option legislated under the Bankruptcy and Insolvency Act and filed with a licensed trustee in bankruptcy.
Filing a Consumer Proposal
A consumer proposal:
- Prevents creditor action including collection activity and wage garnishments
- Stops all interest charges
- Allows you to compromise (pay a portion acceptable to your creditors and yourself) your total debt
It is the right option if you:
- Have a consistent source of income
- Are able to make monthly payments
- Are not able to make the required monthly payments on current debts
Advantages to you:
- Avoid bankruptcy
- Consolidate debt payments into one monthly payment
- Compromise the amount you owe
- Make personal budgeting easier
- Protect assets from creditors
- Does not require you to submit monthly income reports
Consumer proposal is different from filing personal bankruptcy because:
- It is a debt settlement option that allows you to compromise your personal debts
- You make affordable monthly payments to a maximum of 60 months
- Pay back a percentage, acceptable to your creditors and yourself, of your personal debt
- Results in a R7 credit rating which remains on your credit report for 3 years after your consumer proposal is paid in full