Consumer Proposal Benefits in Ontario
A consumer proposal can reduce your debts and give you a fresh start
The benefits of a consumer proposal in Ontario
9 key benefits: stop collection calls, keep your assets, one affordable payment, no interest, free credit counselling, legally binding, less credit impact than bankruptcy, avoid bankruptcy, reduce debt up to 80%.
A consumer proposal offers Ontario residents a simple and effective way to deal with debt by reducing what you owe, protecting your assets, and giving you a single affordable monthly payment.
It is a government approved solution that stops interest, ends collection pressure, and helps you regain control of your finances with a clear path forward.
Debts you can include in a consumer proposal
*Student loans if you have been out of full time studies for seven years or more
Debts you cannot include in a consumer proposal
- Mortgage balances
- Child support
- Spousal Support
- Court fines
- Secured Car loans
- *Student Loans
*Student loans if it has been less than seven years since you finished full time studies
What Are the Advantages of a Consumer Proposal?
In this video, Richard Sklar, a Licensed Insolvency Trustee at David Sklar & Associates in Ontario, Canada, explains the top 5 benefits of filing a consumer proposal to help you take control of your debt.
You don’t need to pay anything to speak to an LIT and no one else needs to represent you.
Consumer proposal benefits include:
1. Protection from creditors
Once your consumer proposal is filed , you are granted an automatic stay of proceedings. As a result, your creditors can no longer initiate lawsuits against you, including garnishing your wages. In addition, your creditors must also stop contacting you for payment, which means you can say goodbye to those irritating collection calls!
2. Keep your assets
Unlike personal bankruptcy, you’re not required to surrender your assets when you file a consumer proposal. Neither your unsecured creditors nor the trustee can seize your home, car, investments, and other personal belongings.
3. One monthly payment
Under a consumer proposal, your remaining unsecured debts are consolidated into a single sum. As a result, you’ll only need to contribute one reduced monthly payment over a maximum of five years. No interest or penalties will accrue on your balance, saving you potentially thousands of dollars each year.
4. Credit counselling
You’ll receive two free credit counselling sessions as part of the consumer proposal process. During each session, you’ll learn valuable knowledge about rebuilding your credit and avoiding future debt problems.
5. Predictable payments
Under bankruptcy, your monthly payment can fluctuate based on how much income you earn. As a result, the more you make, the more you must pay, which can get very expensive for your household.
With a consumer proposal, your monthly payment does not increase even if your income does. As a result, you benefit from a stable and predictable payment schedule.
6. Legally binding agreement
Once your creditors approve your consumer proposal, they’re legally bound by its terms and conditions. They cannot pressure you to increase your payment size or amend the contract while the proposal is in effect. Nor can they send your account to collections or threaten you with lawsuits.
7. Less impact on credit score
Compared with bankruptcy, a consumer proposal has a less severe impact on your credit score. It’ll remain on your credit report for three years after you’ve made your final payment or six years from the filing date, whichever arrives sooner.
Conversely, bankruptcy can stay on your credit report for up to seven years after you receive your discharge which could be between 9 months to a few years following bankruptcy filing.
8. Avoid bankruptcy
By opting for a consumer proposal, you avoid the need to file for personal bankruptcy. While bankruptcy can eliminate 100% of your unsecured debts and is the ideal option for some people, it carries some harsh consequences. These include the requirements to surrender certain assets you own and potentially steep monthly payments. There’s also a social stigma attached to bankruptcy, which can negatively impact your employment and social life.
9. Pay Off Early Anytime
With a consumer proposal, you have the flexibility to pay more than your required monthly payment or pay the remaining balance in one lump sum. This can help you complete your proposal sooner and start rebuilding your credit faster. Bankruptcy does not offer the same flexible early payout option, as the length and cost of bankruptcy are based on factors such as your income, surplus income obligations, assets, and whether you have been bankrupt before.
Ready to get started?
If you want clarity on which of your debts qualify, the team at David Sklar and Associates is here to help. Our Licensed Insolvency Trustees will review your full situation, explain exactly what can be included, and outline your options in a way that makes sense.
Book a free and confidential consultation today and get the answers you need to take control of your debt.
A consumer proposal can save you thousands of dollars
If you have $55,000 of debt, you have a few options of how you could choose to pay it back.
If you’re scratching your head and wondering how it’s possible to repay only $19,200 of a $55,000 debt, you’re not alone. A consumer proposal can reduce your debt by 70% – 80%!
More Canadians choose a consumer proposal over filing personal bankruptcy and here's why:
Consumer Proposal
Personal Bankruptcy
Keep your Assets
Lower Monthly Payments
Avoid Bankruptcy
Avoid Surplus Income
Protection from creditors
Differences to be aware of:
- With bankruptcy, some of your assets are not protected. With a Consumer proposal your assets are protected.
- If your income increases after declaring bankruptcy, your monthly payment will also increase. With a consumer proposal, your monthly payment will not change, regardless of any increases to your income.
- You have the option to pay off your consumer proposal at any time and begin the road to financial recovery sooner. With personal bankruptcy, the length of time it takes to receive your discharge depends on many factors. Learn more about bankruptcy
- In general, there are fewer requirements involved with a consumer proposal than with bankruptcy.
If you have any additional questions about consumer proposal vs personal bankruptcy, we are just a phone call away.
Who Can File a Consumer Proposal for You?
Only a Licensed Insolvency Trustee can file a consumer proposal on your behalf. You do not need a referral, and you do not need to work with a debt consultant first.
At David Sklar & Associates, you can speak directly with a regulated Licensed Insolvency Trustee firm. Our team will review your situation, explain your options, and help you understand whether a consumer proposal may be the right fit.
It’s time to take control of your finances
At David Sklar & Associates, we’ve helped thousands of individuals conquer debt problems through consumer proposals.
Contact us today for a free, no-obligation consultation to see how filing a consumer proposal can give you the fresh start you deserve.
Frequently Asked Questions About
Benefits of Consumer Proposal
What are the benefits of filing a consumer proposal in Ontario?
Top benefits include: reducing total debt up to 80%, stopping all interest, keeping all your assets (home, car, RRSPs), one affordable monthly payment based on income, automatic protection from creditors, and avoiding bankruptcy.
Can I keep my house and car in a consumer proposal?
Yes. Unlike bankruptcy, a consumer proposal lets you keep ALL your assets including home, vehicle, RRSPs, RESPs, and investments. You continue making your secured loan payments (mortgage, car loan) normally.
Does a consumer proposal stop interest from accruing?
Yes. Once your consumer proposal is filed, all interest stops accruing on the included debts immediately. You only pay the reduced principal — no interest, no penalties, no late fees.
How much debt can I eliminate with a consumer proposal?
A consumer proposal may allow you to repay only a portion of your unsecured debt, with some David Sklar clients reducing their debt by 70% or more. The exact amount depends on your income, expenses, assets, family situation, total debt, and creditor approval.
Can I pay off my consumer proposal early?
Yes. You can voluntarily increase payments or pay off your remaining balance as a lump sum at any time. Many clients finish their proposals years ahead of schedule.
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