A Fisher Associates | Consumer Proposal

What is a consumer proposal ?

A consumer proposal is a legally binding agreement between you and your creditors that allows you to pay a portion of your debts, often as little as 30%, through a single, manageable, monthly payment. A consumer proposal can only be filed with a federally regulated Licensed Insolvency Trustee. An alternative to bankruptcy, a consumer proposal provides protection from creditors and allows you to keep all of your assets. It will stop harassing phone calls from your creditors, wage garnishments, and lawsuits, while allowing you to keep all your assets, including your home and vehicles.  A typical consumer proposal could reduce your debts by as much as 70% or more and once it is completed you will be debt free.

What debts can be included in a consumer proposal?

You can eliminate most unsecured debt in a consumer proposal.

Typical unsecured debts that can be included in a consumer proposal are:

  • Credit Cards
  • Bank loans, including overdraft accounts and unsecured lines of credit
  • Payday loans
  • Taxes
  • Personal loans
  • Student loan debt – with certain restrictions

What debts can’t be included?

Although a consumer proposal is a positive way to reduce and eliminate your unsecured debts and start on the road to rebuild your credit, there are certain debts that cannot be eliminated through a consumer proposal, including:

  • Fines or penalties imposed by a Court
  • Unpaid alimony or child support
  • Debts that arose as the result of fraud
  • Certain student loan debts

You should also note that secured debts, guaranteed by an asset, such as a mortgage on your house or a vehicle loan, cannot be eliminated in a consumer proposal.

If you opt to enter a consumer proposal you have the option of continuing payments to your secured creditors or, stop paying and surrender the asset.


What are the benefits of a consumer proposal?

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No upfront fees

You’ll be offered free advice about your financial circumstances and how a consumer proposal could benefit you by one of our Debt Solution Advisors. Once you and your advisor have agreed on a monthly payment you can afford, there is no interest on your payments, there are no additional professional fees or costs for the Licensed Insolvency Trustee’s involvement and there are no penalties if you are able to pay your consumer proposal off sooner.

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Affordable monthly payments

A consumer proposal allows you to consolidate your debts into a simple single payment each month. The amount you pay will be based on what you can afford to pay.


Protection from your creditors

A consumer proposal provides complete legal protection from your creditors; they can’t call or collect their debt. A consumer proposal will stop your wages from being garnisheed and will lift any freeze on your bank account. It will prevent creditors from starting a legal action, and even if a legal action has already been commenced, it will stop the action. A consumer proposal even gives you protection from Canada Revenue Agency.


Interest rates frozen

Entering a consumer proposal will ensure all interest charges on your debts will freeze.


Budget control

Your monthly payments will take your expenses into account, offering the opportunity to regain control of your budget. The amount you repay will fit within your budget and the total term will not exceed five years.


Legally binding

Once a consumer proposal has been accepted by the required majority, it is a legally binding on all creditors, including Canada Revenue Agency.


Avoid bankruptcy

A consumer proposal is an alternative to bankruptcy while still offering debt relief.


Debt free on completion

Once your consumer proposal is completed, your debts will be eliminated, allowing you to get a fresh start. Speak with a licensed professional to start on the road to becoming debt free. Before entering a consumer proposal, you need to speak with a Licensed Insolvency Trustee who will review all options and discussion the best solution to suit your needs.





Is a consumer proposal right for you?

A consumer proposal could be the best solution to your financial situation if:


Living with debt can be a stressful and isolating experience, however, the most important thing to remember is that you’re not alone. Our expert Debt Solution Advisors are on hand to help you find the best solution to your financial problems.