Consumer proposals are rarely rejected, however, if your creditors do reject your consumer proposal, all hope is not lost. When you file a consumer proposal, your creditors have 45 days to vote on whether they will accept the terms that you offered (this includes terms such as the payment amount and the length of the proposal) or reject those terms. Consumer proposals are accepted or rejected based on votes by your creditors. The voting system operates under…
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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Debt Settlement in Canada
You don’t want to go bankrupt but are confused about your options to deal with your debt. In Canada, you might choose to consolidate your debts through a debt consolidation loan, talk to a credit counsellor about a Debt Management Plan or settle your debts through a Consumer Proposal. There are also many unlicensed debt consultants out there advertising proposals. How do you know what option is safe and right for you?
A Consumer Proposal Administrator is required by law to discuss all of these alternatives with you. Read more in our article comparing debt settlement options across Canada
What is Surplus Income? When it comes to the bankruptcy process, there is one factor that usually confuses most people. This concept is called surplus income. Surplus income you may ask? How does a term with the word “surplus” even relate to someone who’s considering filing a Bankruptcy? If you have surplus income then you should be laughing right? Wrong. Basically what surplus income means in a Bankruptcy is, the more you make the more…
Because a consumer proposal is a negotiated debt settlement, how much you pay and for how long depend upon the agreement, or proposal, you put to your creditors. There are some conditions however. The maximum period of time that you can offer to pay a consumer proposal over is five years. However, there is no minimum time frame. If you have the ability to offer to repay a portion of your debt as a one-time…