Increasing Rates of Consumer Proposals in Toronto CMA

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

Bankruptcies 12,208 10,597       15.2%↑
Proposals 6,880 5,942       15.8%↑
*Census Metropolitan Area

2009:

Insolvencies Filed by Consumers in 2009

Toronto (CMA*)

2009

2008

% Change

Bankruptcies 15,423 12,208       26.3%↑
Proposals 10,230 6,880       48.7%↑
*Census Metropolitan Area

2010:

Insolvencies Filed by Consumers in 2010

Toronto (CMA*)

2010

2009

% Change

Bankruptcies 10,996 15,423       28.7%↓
Proposals 11,566 10,230       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 and live in the Toronto area, call us at 416-498-9200 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 cannot emphasize enough how thankful I am for Jackie Stanley's help with filing for bankruptcy.All of us dread being put in this position and we have a million questions about the process but trust me Jackie makes it so easy for you that you don't have to do anything yourself!She is very kind and friendly and puts you at ease right away. She emphasizes with you and let's you know it's not your fault.Most importantly when you leave that first meeting you will not believe the load that is taken off your shoulders. You can actually feel it!You are a godsend Jackie and I can't thank you enough!!I hope you are highly valued there as much as you are by me!
Sue Murray
18:45 05 Dec 21
Putting together and executing a Consumer Proposal can be daunting, that is unless you work with Cori Naron at David Sklar & Associates Inc. Cori's advice and support has been instrumental over the past five years. Thank you Cori!!
Barry Kuntz
20:37 01 Dec 21
I’m very happy with the services I received for Jackie Stanley who helped me get my finances in order. It was a quick and easy process & all of my questions were answered.
Amanda Frappier
01:18 19 Nov 21
I have had the privilege of being supported by Jackie at David Sklar Associate. She was very helpful, very professional and very friendly. She gave me the help I need. Thank you Jackie for your help.
Alex Taylor
22:03 17 Nov 21
Got my probe solved, great service
arny raposo
17:02 11 Nov 21
Jackie at Daivid Sklar and Associates is such a pleasure to work with. She explained everything in great detail and is always there when I have a question or concern. She really cares about her clients.
Steve Medica
09:33 10 Nov 21
I filed a proposal with another group, which came in as a referral from one of my brokers. My experience went from ok to bad to worse, due to lack of communication and education on the process I was to embark on. I worked with Cori Naron in the past, and I came to her now for help on literally doing the work that the other group should have done. Cori stepped in, educated me, advised on rights, responsibilities, how the process works and what potential outcomes may happen. I do not have enough words of recognition and gratitude for what she did - she alleviated stress, anxiety, dead-end thoughts and she made me live again. Congrats to DSklar for hiring her and retaining such talent.
Giani Kokolakis
18:45 25 Oct 21
Very professional service. Before contacting David Sklar & Associates i contacted bunch of other firms they seemed fishy. After I spoke with Jason Sklar at Hamilton Office I discovered professionalism with hope. I was explained every step of my situation with solution professionally. Thank you David Sklar & Associates.
Wajay Awan
07:29 12 Oct 21
I met David a few months ago and i am glad I did. He has helped me all the way through my bankruptcy with good advice and explained every step of the process. David is a very down to earth and very professional. Anytime I've had a question I was able to reach out to David by phone or email and he always got back to me. If your struggling with your bills and need a way to get help, I strongly recommend David Sklar &Associates to help you. My experience with them on 1-5scale would be a 5;; My life is so much better now, thanks to David Sklar.
Bruce Locke
16:13 08 Oct 21
I have had the privilege of being supported by Jackie S, at David Sklar n Associate.She was helpful, professional and friendly. I was able to get the help I needed at a difficult time in my life. I would recommend anyone who needs support with working out their debts to ask for Jackie, she will be waiting to assist however she can to help you through your debts. She works with a team who is always ready and responsive.Thank you Jackie and your team:)
Denise Simpson
15:17 09 Sep 21
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