Consumer Proposal
Process Overview

A Consumer Proposal is a legally binding agreement between a debtor  and their unsecured creditors – as set out in the Canada Bankruptcy and Insolvency Act. This agreement allows the debtor to get out of debt by paying a portion of that debt - without declaring bankruptcy.

Because a Consumer Proposal can only legally be submitted to creditors by a licensed Bankruptcy Trustee (such as David Sklar & Associates in the Greater Toronto Area) – an essential first step in the Consumer Proposal Process is to find an authorized Trustee in your area. Working with your Trustee you will be able to determine if a Consumer Proposal would be best for you.

Consumer Proposal Process

1. Having worked with a Trustee in Bankruptcy and identified a Consumer Proposal as your best insolvency option, you then work together to develop a Proposal that is acceptable to both you and your unsecured creditors.
2. The Trustee will then file your Proposal with the Office of the Superintendent of Bankruptcy. The filling of your Proposal will require your unsecured creditors to stop any legal actions, wage garnishees, and credit collections against you. At this point, interest on unsecured debts stops accumulating. Filling will also mean that you will stop making any direct payments to your unsecured creditors.
3. The Trustee will then submit the Consumer Proposal and a report on your financial situation (including the reasons for your financial problems) to your creditors.
4. Your creditors then have 45 days to accept or reject your Proposal. There are a number of steps involved in the acceptance of a proposal, which your Trustee will oversee. Ultimately, based on reports from your Trustee and the decision of your creditors, your Proposal is deemed to be accepted if no objection or request for meeting is received from your creditors. Further, after 15 days from creditor approval, it is deemed accepted by the Court.
5. If your Consumer Proposal is accepted, you will:
   1. follow all of your Proposal conditions
   2. make the required debt payments as agreed upon to the Trustee who will distribute the funds
   3. keep your assets – as long as you make the required payments to your secured creditors
   4. attend two financial counselling sessions
   5. accept that your credit record will now contain the details of your Consumer Proposal, which will remain on your credit history for a period of three years from the date you have completed the Consumer Proposal in full and have been legally released from the debts it covers.
6. If your Consumer Proposal is not accepted, you may:
   1. resubmit your Proposal after having made reasonable changes
   2. review your situation to see if you have any other options of paying your debts
   3. file for bankruptcy
7. If you complete and fulfill all of the conditions of your Consumer Proposal – you will be legally released from the debts covered in your Proposal.
8. If you fail to meet the conditions of your Consumer Proposal, specifically, if you miss three months of payments without filing an Amendment to your Proposal – the Proposal will be deemed annulled – and your creditors will be able to take all necessary legal actions to collect the debts you owe them.

Consumer Proposal Considerations

If you are considering exploring your Consumer Proposal options – call David Sklar & Associates – for a Free Consultation. We can help you understand what your current financial situation is, how best to correct it, and how to move on to a better life. With five offices in the Greater Toronto Area – we are here to help. Call 416-498-9200 or get started with our Quick Assessment Form to book your Free Consultation.

David Sklar & Associates Inc - Greater Toronto Ontario Bankruptcy Trustee
Consumer Proposals ~ Debt Consolidation ~ Debt Management ~ Bankruptcy