Increasing Rates of Consumer Proposals in Toronto CMA

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Increasing Rates of Consumer Proposals in Toronto CMA

In an earlier consumer proposal blog, we noted the apparent increase of the rate at which people who were insolvent, were filing for consumer proposal, and division 1 proposals, as opposed to filing for bankruptcy in the Toronto CMA (Census Metropolitan Area).

Recent statistics from the Office of the Superintendent of Bankruptcy, indicate that this trend continued throughout 2010, and into 2011.

To put this into perspective:

Proposals have been an option in Canada since 1993, when they were introduced in the Bankruptcy and Insolvency Act.

In 2009, the total amount of debt (not including the mortgage on their prime residence) an insolvent person could have and still be eligible to file for a consumer proposal was increased from $75,000 to $250,000. Insolvent individuals, who owe more, may be eligible for the division 1 proposal.

Also of importance, in 2009 the rules surrounding bankruptcy were tightened, with the result that for many, bankruptcy has become a much longer process that requires increased levels of surplus income payments.

2008:

Insolvencies Filed by Consumers in 2008

Toronto (CMA*)

2008

2007

% Change

Bankruptcies12,20810,597      15.2%↑
Proposals6,8805,942      15.8%↑
*Census Metropolitan Area

2009:

Insolvencies Filed by Consumers in 2009

Toronto (CMA*)

2009

2008

% Change

Bankruptcies15,42312,208      26.3%↑
Proposals10,2306,880      48.7%↑
*Census Metropolitan Area

2010:

Insolvencies Filed by Consumers in 2010

Toronto (CMA*)

2010

2009

% Change

Bankruptcies10,99615,423      28.7%↓
Proposals11,56610,230      13.1%↑
*Census Metropolitan Area

Using the above statistics for the Toronto Census Metropolitan Area, we see that:

  • In 2007: 35.9% of Consumer Insolvencies were Proposals
  • In 2008: 36.0% of Consumer Insolvencies were Proposals
  • In 2009: 39.9% of Consumer Insolvencies were Proposals
  • In 2010: 51.26% of Consumer Insolvencies were Proposals

Why are more insolvents choosing to file for consumer proposals vs bankruptcies in the Toronto area?

There are a number of factors, most notable of which are the advantages of a consumer proposal:

  • avoids bankruptcy,
  • enables insolvents to pay off some of their unsecured debt,
  • insolvents are able to keep their assets (as long as they make payments on secured loans on those assets),
  • no need to declare one’s self as having been a bankrupt on employment forms, etc.,
  • increases in income do not require higher payments, and
  • renegotiation of proposal terms may be possible if income decreases.

In addition, a consumer proposal offers many of the same protections of a bankruptcy:

  • stops collection calls from unsecured creditors,
  • stops all legal collection actions by unsecured creditors including removal of garnishees, and
  • provides insolvents with a chance of a ‘fresh start’ in life.

As mentioned earlier, the tightening of the bankruptcy rules in 2009 have made bankruptcy a less attractive alternative for some individuals with surplus income.

Filing for Consumer Proposals in Toronto CMA

At David Sklar & Associates, Licensed Insolvency Trustee*, we recognize the importance of informing people about all of their options for getting rid of overwhelming debt. That is why we offer a free initial consultation at all of our Greater Toronto locations. Our Licensed Debt Professionals™ will review your financial situation in detail, and discuss all of your options with you.

If you live or work in the GTA and need our help, book your free consultation by calling our central booking number at 416-498-9200.
*In Canada, only Trustees in Bankruptcy are authorized to file and administer Consumer Proposals.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt, call us at 1-844-962-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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I was quite nervous and a little embarrassed that I needed financial advice. I met with Jerry Janiec and he was very helpful. He made me feel comfortable and explained everything in easy to understand terms so that I understood what my options were. I would recommend David Sklar & Associates for anyone in my position.
Melissa Blackburn
19:53 17 Nov 22
I was fortunate enough to be referred to David Sklar & Associates Inc. by a family member. Now in the10th month of a Consumer Proposal process, I am very impressed with the organization, professionalism and impeccable customer representation that I have experienced. To this effect, I amparticularly thankful to Jerry Janiec and Rhoda Lewis for their excellent work.
Suzanna Vaclavik
12:21 16 Nov 22
Recently dealt with Christine at David Sklar & Assoc. and worked out a Consumer Proposal to put forth to my creditors for my Credit Card debt. She was very courteous, professional and put me at ease with a proposal that I can afford on a monthly basis, which will eliminate my debit in a reasonable timeframe. I would recommend Christine and this firm in a heartbeat. Very happy with the service and attention I got !!
Patrick Kovanchak
01:59 15 Nov 22
Excellent customer service. Special thanks to Olga for being prompt and helpful. She’s a star. Bibi is helpful as well. Great agency to work with.
Fady Tadros
19:28 14 Nov 22
After seeing your commercial play on CP24, I realized that it addressed all the questions and concerns I had about my financial situation. It all started with my one phone call to your office. I had the extreme pleasure of working with Cori Naron at your St. Clair West office in September 2022. She took the time to explain what my options were knowing that it was a very stressful situation with my debt load. She made me feel at ease with my decision to file a consumer proposal and outlined the benefits to me. She is thorough and her attention to detail is outstanding. While it takes a little while to reap the benefits of making this hard decision, she took the time to reassure me that it was in my best financial interest. Well done David Sklar & Associates for having such an amazing representative at your company and for allowing me to "get a fresh start"!
David
14:31 14 Nov 22
Very highly perfection individual, well executed and greatly knowledgeable in his work, which guided me me the right decisions making opportunities. Thank you.Sincerely, Peter Romasz
Peter Romasz
20:18 13 Nov 22
Trina Powell was very helpful and made the process very easy. Thanks again for all your help.
Jennifer Hager
17:59 06 Nov 22
Jerry is a caring, trustful, knowledgeable and competent Sklar associate. He understood my needs and quickly went to work on my behalf. Ever indebted to David Sklar and Associates and especially to Jerry for his professionalism and caring approach.
David Craig
19:31 31 Oct 22
Jerry Janiec is very knowledgeable and very helpful everything he explained to me was straightforward and very easy to understand. I'm very pleased to be working with Jerry to become debt free. I will definitely be recommending to any friends or colleagues your services.Thank you again for helping me get on the road to be debt free. 5 Stars is well deserved.
Christopher Rakobowchuk
17:41 27 Oct 22
Hi there! I am very glad to met this company, especially Jackie Stanley. Thanks for her great work and help me to save my money! Very appreciable!
Mehri Agil
02:43 26 Oct 22
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