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The main goal of this blog is to help our website visitors better understand Consumer Proposals and the less frequently used: Division I Proposals – through explanation and example.

As one of the leading Bankruptcy Trustees in the Greater Toronto Area, we have helped thousands of people through the Consumer Proposal process and onto better lives.

What is a Proposal?

It is a legal process provided by the Bankruptcy and Insolvency Act that enables qualified individuals who are unable to reasonably repay their unsecured debts, make legally binding proposals to their creditors. These proposals are agreements to repay a portion of the unsecured debts through the services of a Licensed Bankruptcy Trustee*. While the amount of debt being repaid is usually substantially less than the actual amount owed, it is normally more than the creditors would get if the debtor went into Bankruptcy.

How does a Division I Proposal differ from a Consumer Proposal?

The Consumer Proposal is for individuals with total debt of under $250,000 (excluding their primary residence mortgage), while the Division I Proposal is for individuals with total debt over $250,000 (excluding their primary residence mortgage) and for businesses.

Under either Proposal, creditor-approved applicants can avoid Bankruptcy and keep their assets (note: secure loans on assets must be paid in order to retain those assets).

Once Implemented – How it Helps

Once a Proposal is in place, all unsecured debt collection efforts, including calls, letters, wage garnishments, and legal actions must, by law – stop.

During the life of the Proposal, the debtors have legally binding obligations that they must honour – including systematic debt repayment, budgeting, and most importantly debt management training.

*Note: Under the Bankruptcy and Insolvency Act only Licensed Bankruptcy Trustees can submit and manage Proposals. Before any decision about making a Consumer Proposal or a Division I Proposal can be made – a Licensed Bankruptcy Trustee must evaluate an individual’s current situation.

We Can Help

If you live in the Greater Toronto Area and are dealing with overwhelming debt, call the offices of David Sklar & Associates at (416) 498-9200 to book your free initial consultation at one of our six convenient locations.


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If your debt problems seem insurmountable – we can help. At David Sklar & Associates, our Licensed Debt ProfessionalsTM have the experience and knowledge to help you get out of debt. During your consultation, we will help you understand what your current financial situation is, how best to fix it, and how to move on to a better life. With six offices in the Greater Toronto Area – we are here to help.

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