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Consumer proposal for debt relief.

Is the end of the month becoming more and more stressful with creditors calling you?

This is a sign of over-indebtedness, and the time to act is now!

A consumer proposal could be an effective tool to allow you to settle your debts and start afresh. You just need to understand how it works, and what you have to do.

That’s why Compare Home Quotes explains EVERYTHING you need to know about a consumer proposal!

What are its advantages, financial impact, and effect on your credit record? We want to give you all the information you need so you can make the best decision to repair your finances.

To help you in this process, we can refer you to a trustee in bankruptcy in your area to discuss your financial situation.

Fill out our form to speak with a trustee about a potential consumer proposal – there’s no obligation!


What is a consumer proposal?

Contrary to popular belief, a consumer proposal is far from being the same thing as bankruptcy!

On the contrary, the purpose of a consumer proposal is to AVOID the need to resort to personal bankruptcy, as well as the consequences of such a remedy.

How does a consumer proposal work?

A consumer proposal is an agreement made with creditors through a trustee in bankruptcy. The purpose of this agreement is to reach a settlement with your creditors in order to reduce the amount of debt owed to them, to extend the repayment period, or combine these two aspects.

In many cases, this proposal will be accepted by the creditors as long as the offer is reasonable since if they refuse, you will most likely go bankrupt. And in such a scenario, no one usually wins.


But BEWARE – A consumer proposal is not just any agreement – it is regulated by law! It is a formal procedure governed by bankruptcy law and must be administered by a trustee. And in all cases, it must last a maximum of 5 years!

Although it is a formal process, the consumer proposal comes with many advantages!

What are the ADVANTAGES of a consumer proposal?

Discussion of options with a trustee for filing a consumer proposal.

Since it is a recourse governed by the Bankruptcy Act, the consumer proposal can be understandably scary for some people and with good reason.

However, when a financial situation becomes precarious to the point that bankruptcy becomes a possibility, a consumer proposal can be an unexpected lifeline.

Moreover, filing a consumer proposal comes with concrete benefits that have an immediate impact on your financial situation:

As soon as the documents are filed with the Office of the Superintendent of Bankruptcy, a consumer proposal prevents your creditors from filing lawsuits, recourses, and seizures against you to recover their debt. A freeze on proceedings comes into effect from that point on.

As soon as the proposal is filed, the interest stops accruing. This is an effective and immediate way to stop the hemorrhaging of debt.

A consumer proposal is usually the last solution before facing bankruptcy. When you reach this point, it means that your money problems are serious.

Filing a proposal is an opportunity to avoid personal bankruptcy!

You are making a consumer proposal because your financial obligations exceed your ability to repay.

That’s why the proposed settlement to creditors will only offer a partial repayment of the amount that is owed. This allows you to lighten the load of repayment, and to tailor the proposal to your financial capacity.

A consumer proposal can be spread over a maximum of 5 years. By spreading your debt repayment over 60 months, your monthly payments are lower and you establish a date when your debt gets fully repaid. 

In the end, with all of these benefits, your stress level is greatly reduced and you get a second chance to rebuild your finances and your future.

Are you eligible for a consumer proposal?

Eligibility for a consumer proposal.

A consumer proposal is an effective solution, but you still need to be eligible. Eligibility is rarely an issue when it comes to a consumer proposal, but certain guidelines must be respected.  

Here are some criteria that must be met to qualify for the proposal:

En respectant tous ces critères, une personne peut soumettre une proposition de consommateur en passant par les services d’un syndic de faillite!

Et si vous n’êtes pas certain de respecter toutes les conditions mentionnées ci-haut, n’ayez crainte; un syndic se fera un plaisir d’examiner votre dossier et de vous renseigner sur votre admissibilité à la proposition de consommateur.

By following these criteria, a person can submit a consumer proposal through the services of a trustee in bankruptcy!

If you’re not sure if you meet all of the above conditions, don’t worry; a trustee will be happy to review your case and advise you on your eligibility for the consumer proposal.

How much does a trustee charge for a consumer proposal?

The fees of licensed insolvency trustees are determined in advance by the Bankruptcy and Insolvency Act.

And under this same law, the trustee is paid a percentage of the amounts included in the consumer proposal submitted.

Here is how the trustee’s fees work when filing a consumer proposal:

Thus, the fees related to filing a consumer proposal depend on the amount of your debts. 

Below is an example of the trustee fees for a consumer proposal!

A person submits a consumer proposal for $10,000.

The trustee collects the first $1500 in fees: $1500

The trustee takes 20% of $8,500 (in addition to $1,500): $1,700

Total of the fees for the trustee: $3,200

Can the trustees’ fees vary for a consumer proposal?

This method of calculating fees is provided for by law, and all trustees must follow it. This means that the cost of a consumer proposal does not vary from one trustee to another for the same amount of debt.

However, the terms and conditions of this same proposal can vary. This is why it is important to compare professionals to find the insolvency professional that is right for you!

The Right Steps to file a Consumer Proposal

Steps to filing a consumer proposal.

Will it be difficult to file a consumer proposal that meets all your needs?

No, far from it!  There are a few simple steps to submitting a consumer proposal.  Here is an overview of the steps to take with a trustee for a consumer proposal!

1. The initial meeting with the Trustee

An initial meeting with a trustee in bankruptcy is essential so that he can evaluate your needs, your financial situation, your debt level, and other aspects of your case.

Following this meeting, the trustee will know if a consumer proposal is an ideal solution for your situation.

2. Evaluation of eligibility for a Consumer Proposal

Even if it is advantageous, a consumer proposal is not available to everyone. You must be eligible and your situation must be suitable.

The trustee will evaluate your eligibility and the feasibility of a proposal in your situation.

3. Drafting the consumer proposal and signing the documents.

Once you are found eligible and the trustee believes a consumer proposal is in your best interest, he will prepare the proposal and have you sign the relevant documents.

The offer for the creditors must be reasonable, otherwise, they may reject it.

4. Filing the proposal with the OSB and freezing the proceedings.

The trustee will file the consumer proposal with the Office of the Superintendent of Bankruptcy (OSB), which automatically results in a “freeze on proceedings”.

This freeze prevents creditors from taking collection action against you as long as the proposal is not refused. If the proposal is accepted, the protection will continue to apply.

5. Sending the notice to the creditors.

At this stage, the trustee sends a notice to the creditors to inform them that a consumer proposal has been filed. This notice is sent to creditors within 5 days of the proposal being filed with the TSO.

6. Creditor Vote on the Proposal (Within 45 days)

From the time they receive the proposal, the creditors have 45 days to accept or reject the offer submitted to them.

In their response, the creditors also have the right to request that a meeting be held. A minimum of 25% of the creditors must vote in favour of such a meeting which in practice very rarely occurs.

7. Mandatory meetings with the trustee in bankruptcy

Before you can be discharged from a consumer proposal, you must attend two mandatory meetings with a trustee.

These meetings serve to educate you on the proper financial habits to adopt to prevent a repeat of your debt situation.

Topics such as the use of credit, budgeting, and other aspects of personal finance will be discussed.

8. Court Approval and Release of Debts

The last step is court approval. The important thing to know is that you will not have to go before the judge.

If no creditor objects to the proposal within 15 days of its approval by the other creditors, it is considered automatically accepted.

Once these steps have been completed, your consumer proposal is in place and all that remains is to respect its terms. Once the proposal is paid in full, you will be free of your debts!

Is a meeting of creditors really necessary?

When filing a consumer proposal, a meeting of creditors may be required.

But this is not always the case!

When is a meeting of creditors required? 

A meeting will only be held if 25% of the creditors vote in favour of such a meeting.

If this is the case, the trustee is responsible for organizing the meeting and will conduct it once the creditors have been invited.

At this meeting, the majority of the creditors will have to accept the proposal, otherwise, it will be rejected.  

In practice, such a meeting is rarely required, unless the amount of debt is considerable or the proposal is unreasonable.

Consequences of a consumer proposal

Filing a consumer proposal comes with a lot of advantages when your finances are in trouble. This step will help you to get back on track. 

This financial turnaround comes at a price, specifically, consequences to your credit file!

Both credit bureaus are notified as soon as you file a consumer proposal. A notation will appear on your file and may be disclosed during a credit investigation.

The consumer proposal hurts your credit rating, as it will drop it to R7, one of the worst possible ratings (R9 being the worst, and it applies when filing for bankruptcy.) Such a rating will make it difficult to apply for credit! (loans, credit cards, etc.)

A consumer proposal stays on your credit report for 6 years after the proposal is filed or 3 years after the last repayment, whichever comes first.  

Even if the impact of a consumer proposal will eventually disappear, the negative effects will be felt for many years!

What is the role of the trustee in bankruptcy in a consumer proposal?

Working with a trustee in bankruptcy to file a consumer proposal is MANDATORY. He is the only professional legally qualified and authorized to help you with this matter.

During a consumer proposal, the trustee’s role is to:

You need to hire a trustee to file a consumer proposal on your behalf and see it through to completion.

You can find the best professional to handle your case by requesting free and no-obligation offers from our partners using a short online form!

Find a trustee to help you file a consumer proposal

Compare professionals for consumer proposals in your area.

Do you think a consumer proposal will give you a fresh start to help you rebuild your future? Take the time to discuss it with a licensed insolvency trustee in your area!

The best way to find a qualified trustee in bankruptcy from your city is to use the vast network of Compare Home Quotes.  

Fill out our form – it takes less than 2 minutes, and we’ll refer you to a licensed trustee in bankruptcy for your consumer proposal, free of charge!


Complete the form for expert advice, WITHOUT commitment.


Fill out the form and a reputable professional will contact you as soon as possible.