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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Melissa MacKenzie
12:35 29 Mar 23
I would like to thank the team at David Sklar and associates inc. for all the time and effort they put in to support this process for me. This topic can be challenging to disclose but a big thank you to Christine for going above and beyond in guiding me through all my options and supporting me through the decisions. I cannot recommend this group enough , as they have shown me compassion , knowledge , and understanding throughout the entire process. I look forward to the next step of this process and learning how the proper way of becoming financially educated through the support of their financial counselling team. For anyone who is struggling , just know that there is a wonderful group of educated professionals at David Sklar who are available to help!
Michelle Plouffe
18:45 14 Mar 23
It took me awhile to get up the courage to contact David Sklar but I’m so glad I did. Trina walked through my options with me and provided the knowledge I needed to make a decision to help turn my financial situation around. She is patient and empathetic and answered any and every question that I had. Trina provided me the reassurance I needed that I was making the best decisions for me and my family. I’m so happy that I reached out and now have a plan to get back on track.
M. Mackenzie
19:59 12 Mar 23
Trina was very helpful and thorough.
Sam M
15:26 12 Mar 23
Christine was very helpful, kind, and understanding. She explained everything thoroughly, answered any questions I had, and was responsive to any concerns I had. 100% would recommend
Katherine Campbell
17:29 08 Mar 23
Jackie Stanley is excellent she took the time to explain everything to me and I am so grateful to her for giving me a fresh financial start so if you have any doubts don’t and go see her if you want to achieve financial freedom!
Heather Helfield
21:24 06 Mar 23
Amazing friendly staff that knows what they are going. They make a difficult situation not so bad. Would give 10 stars if I could.
alie Balan
22:37 25 Feb 23
Very helpful and kind and gave me all the available options before helping me decide which one was best for me. I would definitely recommend Jackie
Alison Rivard
01:01 21 Feb 23
Great experience i was in financial trouble and someone of my friends recommended this company. Cori is a wonderful and welcoming person she did a very good job and came up with a smooth and flexible monthly payment after the reduction. i highly recommend this company. Thank you David sklar and special thanks to Cori.❤️🙏🏻
Jasmine Joseph
22:08 13 Jan 23
Met up with Mr. Jason Sklar to discuss more in person, very thorough and clear. He is very kind and thoughtful, I will be referring anyone with the same situation to David Sklar & Associates.
Ariel Domingo
02:33 29 Dec 22
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