Consumer Proposal

What is a Consumer Proposal?

It is a process available under Federal law to a debtor to settle debts without filing a bankruptcy.

A consumer proposal is an agreement you make to your creditors to settle unsecured debts by paying less than the whole amount over a period of time – usually one to five years – without interest. Once accepted it is legally binding on all creditors.

It is an alternative to bankruptcy.

A consumer proposal is suited to someone who has property (assets) (e.g. house, car, RESP, and investment plans) that he/she wants to retain or someone who has means to repay a portion of the debt.

It can protect your assets from being seized by the creditors. You can keep your assets.

You can offer (propose) to your creditors to pay a small percentage (usually 25 to 50 percent) of your total debt in small monthly payments without interest.

A simple majority (50.01 %) of the creditor(s) accepting your proposal is all that is needed to legally bind all unsecured creditors. This means that one or more of your creditors cannot opt out or change the terms of the proposal or demand payment from you.

You can pay off your consumer proposal as fast as you would like.