David Sklar & Associates Inc.

Consumer Proposal & Bankruptcy Trustees
Serving the Greater Toronto Area

Consumer Proposal Challenges

There is no doubt about it; Consumer Proposals offer a lot of benefits to debtors and creditors. For the person using a Consumer Proposal it means that they only need to payback a portion of their actual unsecured debt; can keep their assets (if they continue to make all required secured loan payments); and don’t end up with a Bankruptcy on their records. For the creditor, it usually means that they recover more money than in a Bankruptcy.

However, there are down sides. For the person paying a full-term Consumer Proposal, five years can be a long time – and if there is a change in their financial situation that destroys their ability to make the Proposal payments, they can end up back at square one. For the creditor, if a Proposal is defaulted on (annulment), they too can end up back where they were – trying to collect a bad debt.

At David Sklar & Associates:

• We start by working closely with our clients to ensure that they are setting up a realistic Consumer Proposal that they should be able to successfully complete.


• During the mandatory financial counselling sessions, we help our clients to develop the skills they need to complete their Proposal and build a more financially secure future.


• We continue to monitor and advise our clients all the way through their Proposal.


• We encourage our clients to contact us when they need our help.


• We contact our clients if they miss a payment to find out why - and how we can help them stay on track.


• If a client’s financial situation makes a dramatic change for the worse, and they are no longer able to honour the terms of their Proposal we work with them to find solutions such as:


• Request Amendments to the Proposal from the creditors. If the creditors accept, then the client can continue with lower payments. If the creditors reject, then the possibility of counter offers is opened up. We negotiate between our clients and their creditors for a mutually acceptable solution.


• If no Amendments are in place and the Proposal is annulled (usually after 3 missed payments) and the client’s finances turn around, the possibility of reinstating the Proposal may exist (if the original Proposal was filed after September 18, 2009 this can be a fairly simple process, for Proposals filed before this date the process is more complex).


• If the attempts to fix the Consumer Proposal do not work, and there is no reasonable expectation that the client will be able to complete the Proposal – then we help our client to review their situation to see if they need to consider filing for Bankruptcy.

At David Sklar & Associates, the vast majority of our Consumer Proposal clients successfully complete their Proposals. However, for our client’s who run into trouble, we are here to help.