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What is a Consumer Proposal?

Bankruptcy and Insolvency Act

At David Sklar & Associates (Licensed Bankruptcy Trustees serving the Greater Toronto, Ontario area) helping people to find the best solution to their debt problems does not always result in filing bankruptcy. Many of our clients benefit from making use of the Bankruptcy and Insolvency Act, a Canada-wide federal law that allows for a process called Consumer Proposal (also known as Personal Proposal).

A Consumer Proposal is simply an agreement between a debtor and their creditors where the debtor pays only a portion of their debts, thereby avoiding bankruptcy. Under the Bankruptcy and Insolvency Act, a Consumer Proposal can only be made to the creditors through a licensed Bankruptcy Trustee. If the majority of creditors (in value) vote in favour of the Proposal, then the Proposal is a binding contract, which all unsecured creditors must accept – even those creditors who did not vote for the proposal.

How Consumer Proposals Can Work For You:

If you owe less than $250,000 (excluding the mortgage on your main residence) and are unable to payback your unsecured debts in a reasonable manner and period of time, the Bankruptcy and Insolvency Act (applicable in Ontario and all of Canada) allows the use of a simplified process called Consumer Proposal (sometimes called Personal Proposal). A Proposal is designed to help people get out of serious debt and learn how to avoid debt problems in the future – without having to go bankrupt.

By successfully following the Consumer Proposal process, you can

  • Avoid bankruptcy,
  • Keep your assets,
  • Avoid having any further interest charges,
  • Reduce the total amount of unsecured debt owing,
  • Pay off your current unsecured debt in five years or less,
  • Get some “breathing space” so that you can continue to pay your secured creditors (like your mortgage, or car loan/lease holder) without the additional stress of paying the full amount of your outstanding unsecured debt.
  • Stop collection calls by unsecured creditors,
  • Stop garnishment of wages by unsecured creditors,
  • Stop legal actions taken and contemplated by unsecured creditors
  • Learn how to stay out of debt problems.

How Long Can A Consumer Proposal Last?

The maximum amount of time that a consumer proposal can last is 5 years (60 months).

Proposals can be setup for the following time frames:

  • 3 years (36 months),
  • 4 years (48 months), or
  • 5 years (60 months).

In addition, there is also the possibility to make a lump sum proposal to your creditors. This can be enticing for them as they can recoup part of their funds in an expedited time frame have it wrapped up quickly. We can provide more information in this regard once we have met with you and assessed your situation. Lump sums are paid in full upon acceptance – there are no terms.

Proposals can PROVE to be a flexible way for you to settle your debt.

We can prepare a proposal that can meet your budget and your financial situation.

How to Find Out If a Consumer Proposal is Right For You:

With the aid of a Licensed Insolvency Trustee – review your current debt situation and carefully evaluate your options. If you are eligible and a Consumer Proposal is in your best interest – and the Trustee agrees – you can then begin the Consumer Proposal process.

At David Sklar & Associates – your initial consultation is free. Call us today at 416-498-9200 or get started with our Quick Assessment Form to book your Free Consultation.

With six offices in the Greater Toronto Area, David Sklar & Associates (Licensed Bankruptcy Trustee) is one of Toronto’s leading filers of Consumer Proposals – put our experience to work for you.


We Can Help

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.

Call Us Today For a Confidential & Free Initial Consultation Call 416-498-9200

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