How to File a Consumer Proposal in Ontario
Simply book a meeting with us and we’ll do the rest!
How Does Filing a Consumer Proposal Work?
Wondering how to go about filing a consumer proposal in Ontario? It doesn’t take much effort on your part – simply book a meeting with us, and we’ll do the rest! We’ll assess your debt situation, file the necessary paperwork, negotiate a settlement with your creditors, and manage all the details.
Once your consumer proposal is up and running, you only have two obligations: make your monthly payments and attend two credit counselling sessions. It really is that easy!
What to Expect from Our Supportive Staff
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We know your situation is unique, so we take the time to get to know your predicament and devise a plan tailored to your specific needs and goals.
We’re here for you when you’re ready to live your best life debt free!
The 9-Step Process to File a Consumer
Step 1 — Contact a Licensed Insolvency Trustee
The first step is to arrange an appointment with one of our Licensed Insolvency Trustees to review your current financial situation and discuss your options. A Licensed Insolvency Trustee is the only professional in Canada with the authority and expertise to administer a consumer proposal on your behalf.
Step 2 — Review Your Finances
Your Licensed Insolvency Trustee will assess your situation and explain what options you have to reduce or eliminate your debt. Based on your financial circumstances, they’ll determine if a consumer proposal is the best debt relief solution for you or whether filing for personal bankruptcy is preferable. They’ll explain the benefits and drawbacks of both options and answer any questions you may have.
Step 3 — Create a Draft of the Proposal
Suppose you decide with your License Insolvency Trustee that a consumer proposal is the best way to resolve your debts. In that case, the next step is to create a new payment plan to present to your creditors. Your trustee will examine your income, assets, and expenses to determine what percentage of your total debts you can comfortably repay. They’ll work with you to calculate your monthly payment and how long it’ll take to settle your balance in full.
Step 4 — Prepare the Official Documents
Your trustee will prepare all the necessary documents to be reviewed by your creditors. These documents outline how much debt you can repay, your monthly payments, and the time it’ll take to pay off the balance.
Step 5 — File Your Consumer Proposal
Once the required documents are ready, your trustee will file them with the court and the federal government. The court will grant you a stay of proceedings, which prevents creditors from pursuing legal action against you. Any existing wage garnishment orders in effect and collection calls will stop immediately. You’ll also be relieved of any duty to repay your creditors under your old payment terms.
Step 6 — Notify Your Creditors
Your trustee will inform your creditors that you’ve filed a consumer proposal. They’ll provide them with a copy of the proposal for review. Your creditors have 45 days to respond with a decision to either accept or reject your offer.
If more than 25% of your creditors oppose your proposal, they can request a meeting with you and the other creditors, which must take place within 21 days. During the meeting, you and your creditors can negotiate an alternative agreement that’s fair and suitable for everyone.
Step 7 — Creditors Vote on Your Proposal
For your consumer proposal to be valid, the majority of your unsecured creditors, based on the dollar value of your debt, must vote in favour of it. Once your consumer proposal is accepted, it becomes legally binding on all your unsecured creditors, even those who voted against it.
Step 8 — Fulfill the Terms of Your Proposal
Now that your creditors have approved your proposal, you can proceed with making your monthly payments. You’ll submit each payment directly to your licensed Insolvency Trustee, who’ll then disburse it to your creditors.
Your other obligation includes attending two credit counselling sessions, which will equip you with the tools and knowledge to help you manage your money.
Once you’ve completed your consumer proposal, you’ll receive a Certificate of Full Performance and be relieved of any further unsecured debt obligations.
Congratulations, you’re now debt free!
9. Rebuild your credit score
A consumer proposal remains on your credit report for at least three years after you’ve submitted your last payment or six years from the filing date, whichever comes first. However, with no more unsecured debts holding you back, you have a solid foundation to rebuild your credit and work toward a promising financial future.
Learn how using a secured credit card can start improving your credit score.
What If My Proposal Is Rejected?
If your creditors disapprove of your proposal, you can work with your trustee to devise an alternative payment plan. Sometimes, all it takes is an offer of a slightly higher monthly payment to entice creditors into accepting your offer. Remember: your creditors would prefer to recover a portion of the money you owe rather than have you file for bankruptcy, where they risk getting nothing.
Advice on Consumer Proposals
Getting into debt is easy
Getting out is a different story — but it’s possible
Did you know there is a debt relief program federally regulated by the Canadian 🇨🇦 Government, designed to help you avoid bankruptcy? This program can only be administered by a Licensed Insolvency Trustee (LIT).
If you’re struggling to make payments and creditors won’t stop calling, we can help you with a consumer proposal.
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Frequently Asked Questions About
Filing a Consumer Proposal
How long does it take to file a consumer proposal in Ontario?
Initial paperwork can be completed in 1-2 hours during your first meeting. After filing, creditors have 45 days to vote. Once accepted, your proposal lasts up to 5 years from the filing date.
What happens if my consumer proposal is rejected?
You can work with your trustee to negotiate a revised proposal — often a slightly higher monthly payment is enough. Creditors generally prefer a proposal over bankruptcy because they recover more. If still rejected, you may file for bankruptcy as a fallback.
How many creditors need to accept my consumer proposal?
The majority of unsecured creditors based on dollar value must vote in favour. Once accepted by the majority, the proposal is legally binding on ALL unsecured creditors — even those who voted against it.
Can I file a consumer proposal without seeing a Licensed Insolvency Trustee?
No. Only a Licensed Insolvency Trustee is legally authorized to file a consumer proposal in Canada. Lawyers, debt consultants, and credit counsellors cannot file proposals on your behalf.
Here to help you
Our federally 🇨🇦 regulated team of Licensed Insolvency Trustees in Ontario can help you get out of debt and in control of your own financial future.
We’ve helped thousands of people and we can help you too.
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