How does a Consumer Proposal Work?

A consumer proposal must be filed through a Licensed Insolvency Trustee acting as a consumer proposal administrator. It is a debt relief program developed by the government of Canada made available through the Bankruptcy & Insolvency Act as an alternative to bankruptcy.

Your proposal administrator’s role is to:

  • help you determine an affordable repayment plan
  • prepare the necessary forms for you to sign
  • file the proposal to creditors with the government (to make it legally binding)
  • talk to your creditors (so you don’t have to).

Let’s look at an example. Let’s assume you owe different creditors a total of $45,000 in unsecured debts. You may be able to propose to repay your creditors a total of $15,750 in exchange for the elimination of all your debt. You could propose to make payments over 36 months which would result in a payment of $437.50 a month.  Alternatively, if your budget requires a lower payment, you could extend your repayment plan to a maximum of 60 months. That would result in a monthly payment of $262.50.  Either way, you save $29,250 plus interest.

How to file a Consumer Proposal

Making and filing a consumer proposal is a simple process. The basic steps are:

  1. Contact a Licensed Insolvency Trustee for a free consultation. Our friendly and caring team will talk to you about your financial situation and explain all your debt relief options and help you decide if a consumer proposal is right for you.
  2. Determine a payment plan: Your trustee will look at who you owe, what assets you own and your personal budget. From there, they help you develop a repayment proposal that you can afford.
  3. File the proposal: The proposal administrator will prepare all necessary paperwork to submit your proposal to both the government and your creditors. Once this paperwork is signed it will be filed electronically and your creditors will be notified.
  4. Creditors vote to accept the proposal. Your creditors will then vote to accept or reject your proposal or they may make a counter-offer. It is possible to negotiate during this process which may involve a creditors meeting. At Hoyes Michalos we have a 99% acceptance rate so we are confident we can help you create a plan that works for you and will be accepted by your creditors.
  5. Complete your proposal terms: Once accepted, your responsibility is to make payments and attend two mandatory counselling sessions.
  6. Obtain your certificate of completion. After you have made your final payment you will receive a Certificate of Full Performance. Upon completion, the debts included in your consumer proposal are eliminated. You are now debt-free
  7. Begin repairing your credit: You can begin the process of rebuilding your credit history while still in a proposal. It is possible to obtain a secured credit card while you are in a proposal and, because you are no longer making such large debt payments you can begin to build some savings.

Our Consumer Proposal Process

At Hoyes, Michalos & Associates we want your proposal to be a fresh start.

  • we offer convenient pre-authorized payment plans, and you can select the payment frequency that works for you; weekly, bi-weekly, semi-monthly or monthly.
  • our commitment to making your debt recovery process work includes access to free budgeting and money management web pages offered to our clients. We want your consumer proposal to be the beginning of a new financial you!

Considering a Consumer Proposal?

If you feel making a consumer proposal in Ontario is the right debt solution for your debt problems your next step is to speak with our team of knowledgeable Licensed Insolvency Trustees. Contact us at 1-866-747-0660 or email us to request a free evaluation and get started towards total debt freedom.