Consumer Proposal

What is a Consumer Proposal?

proposalIt is a process available under Federal law to a debtor to settle debts without filing 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 the means to repay a portion of the debt.

It can protect your assets from being seized by 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.