David Sklar & Associates Inc.

Consumer Proposal & Bankruptcy Trustees
Serving the Greater Toronto Area

Debt Management Programs vs Consumer Proposals

Debt Management Programs

One of the options available to people in Ontario who are unable to pay off their unsecured debt, is the Debt Management Program - a service overseen by non-profit, professional credit counsellors.

With a Debt Management Program, the credit councillor contacts the unsecured creditors in an effort to have them agree to reduce or stop charging interest on outstanding balances, with the understanding that the debtor (person who owes the debt) will repay the entire amount owing over a set period of time.

Since a Debt Management Program is not a legally binding agreement, those creditors who choose to ignore the offer are free to continue their collection efforts.

There is no charge for the Debt Management Program – however, depending on the applicant’s financial situation they may be asked to make a contribution.

Consumer Proposals

Covered by the Bankruptcy and Insolvency Act, Consumer Proposals are legally-binding agreements between debtors and their unsecured creditors. Administered by licensed Bankruptcy Trustees, Consumer Proposals usually result in settlements that are for less than total amount owing.

If the Trustee and applicant agree, a Proposal is drawn up and registered with the Office of the Superintendent of Bankruptcy. The Trustee then contacts the applicant’s creditors who vote on the Proposal. Once a Consumer Proposal is accepted by the majority of the unsecured creditors, all unsecured creditors must honour the terms of the Proposal. This means that all the unsecured creditors must then:

• Stop all legal collection action.


• Remove garnishees.


• Stop all collection efforts.


• Stop all interest charges.

Proposals cannot run for more than five years.

There are charges for using the services of a Bankruptcy Trustee, however they are taken into consideration when the Proposal payments are calculated, ensuring that the total monthly cost (including debt repayment) is reasonable and often substantially less than would be paid out on a Debt Management Program.

Which is the Best Option For You?

Obviously, we believe strongly in Consumer Proposals – we are Licensed Bankruptcy Trustees who have helped thousands of people in the Greater Toronto Area through the Proposal process. However, we also believe in the need for people in financial difficulty to get as much information as they can, to ensure they make the best decision for their needs – which is why we offer a free initial consultation to explore all available options.

If you are in the Greater Toronto Area and find yourself overwhelmed by debt, contact the caring professionals at David Sklar & Associates. Call 416-498-9200 and book your free consultation today.