Can Payday Loans be Included in a Consumer Proposal?

How to Incorporate Payday Loans into a Consumer Proposal

‍When faced with multiple payday loans, it can become overwhelming and seemingly impossible to manage. However, there’s a helping hand available in the form of a consumer proposal. This article will guide you through the process of consolidating payday loans through a consumer proposal, providing you with all the information you need to know.

What is a Payday Loan?

A payday loan is a short-term loan that you borrow with the promise to repay it on your next payday, hence the name. These loans are usually provided by privately-owned companies rather than banks. You can borrow up to $1,500, and then you have to pay it back along with additional fees when your next payday arrives.

The Challenge of Payday Loans

The real challenge with payday loans is the high interest rate and additional fees that come along with them. With some payday loans, the interest rate can reach up to 400%, which is significantly higher than the average interest rate of a credit card, which is approximately 20%. This is why payday loan debt can quickly spiral out of control, making it increasingly difficult to break free.

The Appeal of Consumer Proposals

If you’re struggling with numerous payday loans and you can’t seem to find a way out, a consumer proposal could be the solution for you. So, can payday loans be included in a consumer proposal? The answer is a resounding yes. A consumer proposal is a legally binding agreement between you and your unsecured creditors to repay a certain percentage of your debts over a specified period.

The Process of a Consumer Proposal

The process of a consumer proposal involves several steps. First, a licensed insolvency trustee will conduct a detailed review of your financial situation. This will determine if you are eligible for a consumer proposal.

Eligibility for a Consumer Proposal

To be eligible for a consumer proposal, you must owe less than $250,000 (excluding the mortgage on your primary residence) in unsecured debts. If you owe more than this amount, you will not be eligible for a consumer proposal. In this case, you should speak to a licensed insolvency trustee about other options such as bankruptcy.

Consolidating Payday Loans using a Consumer Proposal

Once it’s determined that a consumer proposal is the best solution for you, your payday loans will be consolidated into this proposal. This means all your payday loans will be combined into one, making it easier for you to manage.

The Benefits of a Consumer Proposal

There are several benefits of consolidating your payday loans using a consumer proposal. For one, your creditors must stop charging interest, taking legal action against you, and making collection calls. This can provide significant relief and make it much easier for you to pay off your debts.

The Risks of a Consumer Proposal

While a consumer proposal can offer many benefits, it’s also important to be aware of the risks. If you fail to adhere to the terms of your consumer proposal, there will be consequences.

Seeking Help for Payday Loan Consolidation

If you’re struggling with multiple payday loans, don’t hesitate to seek help. There are many organizations out there that can offer assistance and guide you through the process of consolidating your payday loans using a consumer proposal.


In conclusion, payday loans can indeed be included in a consumer proposal. If you’re struggling with payday loan debt, a consumer proposal could be the lifeline you need to get back on track financially. By consolidating your payday loans into a consumer proposal, you can make your debts more manageable and work towards a debt-free future.

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