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Consumer Proposal What is it?

A Look at a Consumer Proposal

A Consumer proposal is a legal and binding agreement which is administered only by a Trustee between the debtor and the creditors. The Trustee prepares a proposal to be submitted to the debtor’s creditors. When approved by the majority of the financial creditors, the debtor then pays a percentage of what is owed back to the creditors.

In a standard Consumer proposal, this refers to unsecured debts up to $250,000, but this does not include your mortgage. Your mortgage is considered a secured debt, and cannot be included. For unsecured debt that is over $250,000, then you will be dealing with a Division 1 Proposal.


With a Consumer Proposal

  • Additional Income – with a proposal, any extra income that is earned, does not change your payments with regards to your proposal.
  • Employment – for any job that requires the individual to be bonded, the job application will typically ask if the person has declared bankruptcy at any time. With a proposal, this is considered different than bankruptcy.
  • Your Credit – With a proposal, this will be associated with the individuals credit history for 3 years after the proposal upon completion.

With Bankruptcy

  • Additional Income – with Bankruptcy, if the individual earns extra money. This can potentially increase the length of the bankruptcy and possibly increase the payments as well.
  • Employment – for a job that necessitates the individual to be bonded. The job application will ask if the person has declared bankruptcy at any time. In this case where the individual has, this can potentially affect the possibility of getting that employment.
  • Your Credit – With Bankruptcy this will be associated with the individuals credit history for 6 to 7 years upon completion. For a second bankruptcy, it will be on file for 14 years.


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If your debt problems seem insurmountable – we can help. At David Sklar & Associates, our Licensed Debt ProfessionalsTM have the experience and knowledge to help you get out of debt. During your consultation, we will help you understand what your current financial situation is, how best to fix it, and how to move on to a better life. With six offices in the Greater Toronto Area – we are here to help.

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