What is consumer proposal Ontario?

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Imagine bundling all those unsecured debts into one manageable monthly payment—that’s a consumer proposal in Ontario. It’s like striking a deal with creditors to pay part of what you owe, all under the Bankruptcy and Insolvency Act. This solution, often guided by a licensed insolvency trustee, can slash your debt drastically while keeping assets like your home and car safe. Reach out via phone, text, or live chat if you have any questions. Not all trustees can be trusted.

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Consumer Proposal Question

What is consumer proposal Ontario? Living in Ontario, I’ve been told about consumer proposals but want to know what makes them unique here and how they can help with my debt situation.

From: Anonymous Question
Location: Whitby, Ontario (ON)
Category: consumer proposal

Consumer Proposal Answer

Imagine being able to gather all your pesky, unsecured debts into one tidy monthly payment — a consumer proposal in Ontario lets you do just that. Picture it as a deal with your creditors to pay back a slice of what you owe, thanks to the magic of the Bankruptcy and Insolvency Act. It’s a savvy move, usually steered by a licensed insolvency trustee, and happens to be the go-to solution for around 75% of folks handling financial hiccups in Ontario, skipping the bankruptcy queue. Not only could this trim your debt down by a whopping 70-75%, but it also keeps your prized possessions—like your home and car—safe and sound. Navigating these choppy financial waters becomes way less daunting when you know your assets are protected and your debt’s manageable.

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

A consumer proposal in Ontario is a formal legal process under the Bankruptcy and Insolvency Act, RSC 1985, c. B-3, that allows individuals to negotiate with their creditors to settle their debts for a fraction of what they owe, while keeping their assets and avoiding bankruptcy.

Unique to Ontario, a consumer proposal must be administered by a licensed insolvency trustee (LIT), who will assist you in creating a proposal that outlines your offer to creditors on how you plan to repay your debts over a specific period, typically up to five years. Under Section 66.1 of the Bankruptcy and Insolvency Act, once the proposal is filed, creditors cannot take further action to collect debts, providing immediate relief.

The proposal must be approved by a majority of your creditors (by dollar value), and if accepted, it binds all creditors to the terms, even those who opposed it. This is defined in Sections 62-70 of the Bankruptcy and Insolvency Act, which govern the procedures of consumer proposals.

In terms of benefits, a consumer proposal allows you to reduce your overall debt, consolidate payments, retain your assets, and avoid the stigma associated with personal bankruptcy.

From: OSB Helper

Related Questions to Consumer Proposals In Ontario

Here are the top 5 most frequently asked questions related to “What is a consumer proposal in Ontario?” based on common queries and concerns:

1. What are the eligibility criteria for a consumer proposal?

You must owe less than $250,000 in unsecured debt, be insolvent, have a stable income, and not have an existing consumer proposal[2][3][5].

2. How does the consumer proposal process work?

The process involves assessing your debt, drafting a proposal, filing it with the Official Receiver, and obtaining creditor approval, with protection from collection efforts during this period[2][5].

3. What are the benefits of a consumer proposal compared to bankruptcy?

A consumer proposal allows you to repay a portion of your debts without losing assets like your home or car, and it often has less severe impacts on your credit score compared to bankruptcy[3][5].

4. How long does a consumer proposal last?

A consumer proposal typically lasts up to five years, during which you make monthly payments as agreed upon in the proposal[5].

5. What happens after a consumer proposal is accepted?

Once accepted, you begin making the agreed-upon monthly payments, attend financial counselling classes, and upon completion, you receive a certificate confirming the proposal is completed and you are released from the debts mentioned[2][5].

If you have a question about debt see our debt questions or ask your own debt related question.

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