Some of the most asked questions surrounding consumer proposals include what they are, what they do, how to file one, and who can file one. At David Sklar & Associates, a big part of our business revolves around helping our clients file consumer proposals.
Consumer proposals are an excellent option for people who find themselves faced with financial problems. A consumer proposal is a legally binding process that allows a person to pay a portion of their unsecured or outstanding debt over no longer than five years. After filing a consumer proposal, a person is free of the debt covered by the process.
The hardest part of the process is making the first call. When you walk through the door, our team will make the process as easy and painless as we can. Our staff are pros who are also compassionate and easy to work with. If you have any questions, we can answer them.
At David Sklar & Associates, we have helped over thousands of our clients get a fresh start by filing for a consumer proposal. We know the ins and outs of the Canada consumer proposal process. This process begins with finding out if you qualify to file a consumer proposal in the first place.
Do You Qualify for a Consumer Proposal?
A licensed insolvency trustee will look at your overall financial situation to determine what you need to be eligible, and if you qualify.
If you are not eligible, a Licensed Insolvency Trustee (LIT) will help you weigh your other options, such as debt management or bankruptcy.
To qualify, you must meet all consumer proposal qualifications:
- Be at least 18 years of age,
- Not owe more than $250,000* (does not include the mortgage on the main residence)
- Be unable to reasonably repay your current unsecured debts in a reasonable length of time (insolvent)
- Use the services of a Licensed Insolvency Trustee to determine your insolvency and eligibility – as well as to prepare and file the Consumer Proposal
- Be financially able to complete the terms of the proposal (able to prove you have a stable income)
- Not have any open or uncompleted previous Proposals.
Additional requirements include:
- If you have an annulled proposal, you must wait until your debts have been paid or removed as a result of bankruptcy
- Being an individual (a business cannot file a consumer proposal)
If you are looking to file a proposal with your significant other due to shared debts or a co-signed loan, you will want to consider if you qualify for what is called joint filing.
More than one person can file a proposal if they meet specific consumer proposal requirements:
- All individuals involved must have mostly or exactly the same debts to pay off
- Total debts must be under $500,000 (excluding the mortgage on their principal residence) when two individuals file together
Do I Qualify for a Consumer Proposal If I’m Already Bankrupt?
If you have already declared bankruptcy, you can still qualify for a consumer proposal. After declaring bankruptcy, you may have achieved stability by obtaining a new job or a new means of income.
In this case, the added revenue could add to your interest and cause a Surplus Income, which will result in you having to pay a more considerable sum of money. A consumer proposal will help prevent this and make your repayments easier to manage.
If You Qualify for a Consumer Proposal
If you meet all of the consumer proposal qualifications, you can work with your Licensed Insolvency Trustee to file a proposal. Once your Trustee has filed your request, your unsecured creditors will look it over and decide whether or not to accept the offer.
If You Are Approved for a Consumer Proposal
If the majority of creditors vote to accept your consumer proposal, and the Court approves it, the proposal will then go into effect.
David Sklar & Associates will help file your proposal and plan your repayment. We help you achieve debt relief as efficiently as possible.
If You Don’t Qualify for a Consumer Proposal
You can have peace of mind knowing that there are other options if your proposal gets rejected.
Work with your licensed insolvency trustee to identify the best options for your situation.
Revisions & Counteroffers
Your Trustee will work with you to revise your proposal or create a counteroffer.
A Division 1 Proposal
Individuals who owe over $250,000 (excluding the mortgage on their primary residence) may be eligible to file a Division 1 Proposal. This proposal is a debt relief option for individuals who owe over this amount and business owners who owe any amount of debt.
This alternative option prevents an individual from having to file for bankruptcy. It is important to note that only bankruptcy trustees can file and administer Division I Proposals in Ontario.
Bankruptcy is the last resort taken when there are no other options for debt removal. When an individual files for bankruptcy, they demonstrate that they are insolvent and have no means to pay their collected debts. When the bankruptcy is approved, an individual will be given an automatic discharge from their debt nine months after filing the proceeding.
Bankruptcy can be an obstacle, but the Licensed Insolvency Trustees at David Sklar & Associates will help you through the process. We help you come out renewed and ready to start on a new path.
How Do I File for a Consumer Proposal?
The first question many people ask at the beginning of the consumer proposal process is, “how do I file for a consumer proposal?” The good news is that your Licensed Insolvency Trustee will guide you throughout this process.
Before you file for a consumer proposal, you first need to consult with a LIT to ensure you are eligible. Once you identify you are eligible, your Trustee will work with you to get together the necessary documentation and file the proposal for approval.
Before your proposal is completed, you will attend mandatory credit counselling to gain the tools and resources you need for debt management and future financial planning.
Where Do I File for a Consumer Proposal?
Your Licensed Insolvency Trustee will collect and organize the documentation needed to complete your consumer proposal and then file it with your unsecured creditors. The proposal will include all relevant information about your current financial situation, including the amount of debt you will repay, how much you will repay monthly, and the proposal’s length.
Find Out If You Qualify for a Consumer Proposal & Weigh Your Options with David Sklar & Associates
Filing a consumer proposal in Toronto doesn’t need to be overwhelming. When you work with us, we walk you through the entire process to ensure you feel comfortable and in control.
We are your source for Canada consumer proposal services and are committed to helping you achieve financial independence.
David Sklar & Associates offers a free initial consultation to help you identify your best options for debt relief. Contact us at 416-498-9200 to book your appointment.