What is a consumer proposal? A proposal to creditors is a deal you negotiate with the people you owe money to in order to repay a portion (or perhaps all) of what you owe. If you like legal terms, a proposal is an “arrangement” to “settle” your debts for less than their full amount. You might be asking yourself, “Why would anyone accept a deal for me to repay less than what I owe?” That’s…
Consumer Proposal: Canada's #1 Alternative to Bankruptcy
A consumer proposal is the only debt settlement program administered by the federal government. It was introduced into the Bankruptcy & Insolvency Act as an alternative to bankruptcy for individuals who are struggling with debt payments but do not want to file bankruptcy.
A consumer proposal gives you protection from your creditors while you make a deal to repay a portion of your debts. You pay only what you can afford. Your creditors get more than they would in a bankruptcy. It’s a win-win for both you and your creditors.
The only way to file a Consumer Proposal is through a licensed Consumer Proposal Administrator. Your administrator is also a licensed bankruptcy trustee since both procedures are governed by the federal government through the Bankruptcy & Insolvency Act. If your counsellor is not a trustee, they cannot file a Consumer Proposal for you.
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Avoid Filing Bankruptcy – Compare Your Options
You don’t want to go bankrupt but are confused about your options. Each have different advantages and disadvantages and we recommend you compare each alternative carefully to see which might be best for you. In Canada, you may choose to consolidate your debts through a debt consolidation loan, refinance with a second mortgage, talk to a credit counsellor about a Debt Management Plan or settle your debts through a Consumer Proposal.
A Consumer Proposal Administrator is required by law to discuss all of these alternatives with you.
Compare Your Options
What is the OSB? The Office of the Superintendent of Bankruptcy (OSB) manages all bankruptcy and consumer proposal filings in Canada. They monitor the administration of bankruptcies and proposals as well as the activities and behaviour of Trustees in Bankruptcy, Consumer Proposal Administrators, creditors and you the debtor. When your Consumer Proposal Administrator files your proposal, the paperwork is electronically sent to the Official Receiver’s office – the federal government body that handles operations for the OSB. They review the documents to ensure that…
When someone meets with a professional to get advice on which option is best to deal with their specific financial difficulties, it can become evident very quickly when filing bankruptcy is not the best choice. At times, a consumer proposal is the more appropriate alternative. To better understand when a consumer proposal might be a good debt solution for you, read the categories below to see if they apply to your personal situation. The High Income Earner…