Consumer Proposal

A legal agreement between a debtor and creditors to settle debts for less than the full amount owing filed under the Bankruptcy and Insolvency Act. A consumer proposal is available to individuals (not corporations) with total debts (excluding the mortgage on their principal residence) not exceeding $250,000. If two people, such as a husband and wife, have common debts, they may file a joint consumer proposal, provided their debts (excluding mortgage) do not exceed $500,000. A consumer proposal is sometimes called a Division II proposal. Individuals with debts of $250,000 or more may file a Division I proposal to creditors.

A consumer proposal can only be filed by a Licensed Insolvency Trustee acting in their capacity as a Consumer Proposal Administrator.