Debt Consumer Proposals


Loans can be revolving door for some who can’t manage it. Borrowing from one lender to pay another and continuing to accumulate debt. It can quickly get out of control if you are unable to make payments.

If this is your situation, it’s not the end of the road financially. Many institutions provide a solution through consumer proposals, which is another option to personal bankruptcy. A consumer proposal is legal agreement that’s negotiated with your lenders through a Licensed Insolvency Trustee (LIT). In this settlement you may only repay a fraction of what you owe, and your creditors agree to forgive the balance.

What is the process?

To find out if a consumer proposal is the right option for you, meet with a LIT about your financial situation. If it is agreed that this is the right choice for you, the LIT create a proposal that works for both you and your creditors.

    1. The LIT will file the proposal with the Office of the Superintendent of Bankruptcy.  Once your proposal is filed, payments to your unsecured debts and/or garnishment of your wages will stop.
    2. The LIT will present the proposal to your creditors which includes a report detailing your personal situation and the reason for your financial difficulties.
    3. Creditors then have 45 days to either accept or reject the proposal.

To qualify you must owe no more than $250,000.00, excluding a residential mortgage, and cannot repay your unsecured debts in a reasonable amount of time.

Advantages of Consumer Proposals


lower monthly paymentsLower Monthly Payments:  It’s not uncommon to see debts reduced by more than half of the original amount owed. Since the interest stops during a consumer proposal, you are able to pay the debt back faster.


save your assetsSave your assets:  The best advantage of a consumer proposal is that you keep all your assets, including investments and home equity.


no more callsNo More Calls: As part of the process during a consumer proposal collection calls and wage garnishments will cease.


avoid bankruptcyAvoid Bankruptcy:  This is one of the best debt consolidation options available to avoid filing bankruptcy. Creditors will usually accept your consumer proposal if they can get more than they would in a bankruptcy.


no added chargesNo added charges:  Consumer proposals have a fixed payment that doesn’t increase, so you free yourself from paying any additional costs, fee or charges to anyone.

Do you want to see if you qualify to submit a consumer proposal? Click here and apply in six easy steps.

Still have questions about mortgage loans in Canada? Contact a Lend for All representative for more information.