Consumer Proposal Cobourg

A Comprehensive Guide to Consumer Proposals in Cobourg

Financial distress can be a daunting experience, but it doesn’t have to be a dead-end. If you’re struggling with debt, a consumer proposal in Cobourg could be the right solution for you. This post will provide comprehensive insights into consumer proposals, their benefits, drawbacks, and how they work.

What is a Consumer Proposal?

A consumer proposal is a legally binding arrangement governed by the Bankruptcy and Insolvency Act. This agreement involves you and your creditors and allows you to repay a portion of your debt based on your income and assets.

Note: A consumer proposal can only be arranged and administered by a licensed insolvency trustee.

How Does a Consumer Proposal Work in Cobourg?

The process of filing a consumer proposal in Cobourg involves several steps:

  1. Consultation with a Licensed Insolvency Trustee (LIT): An LIT will review your financial situation and guide you on the best course of action. If a consumer proposal is deemed suitable, the LIT will help you draft it.

  2. Proposal Submission: The LIT submits the proposal to your creditors, outlining how much you can afford to pay.

  3. Creditor’s Approval: Creditors holding the majority of your debt must approve the proposal for it to be legally binding.

  4. Payment: Once approved, you will pay the agreed amount over a maximum of 5 years.

850 Champlain Ave, Suite 100
Oshawa, ON
L1J 83C

Cobourg Consumer Proposal Office

Benefits of a Consumer Proposal in Cobourg

Consumer proposals offer several advantages, including:

  1. Debt Reduction: Consumer proposals can significantly reduce the amount you owe.
  2. One Monthly Payment: All your debts are consolidated into a single, manageable monthly payment.
  3. Interest-Free Payments: No interest is charged on the debt in a consumer proposal.
  4. Protection from Creditors: A consumer proposal can halt wage garnishments and collection calls.

Drawbacks of a Consumer Proposal in Cobourg

Despite the benefits, there are potential downsides to consider:

  1. Public Record: Your consumer proposal is a public record, which can impact your credit rating.
  2. Creditors’ Approval: Creditors can reject the proposal. If they do, you may have to offer additional funds.
  3. Missed Payments: If you miss more than two payments, the proposal could fall through, and you may have to file for bankruptcy.

Consumer Proposal vs. Bankruptcy in Cobourg

A consumer proposal is often considered a better alternative to bankruptcy. However, it’s essential to understand the differences between the two. While both options can provide debt relief, a consumer proposal allows you to retain your assets and typically results in less damage to your credit score.

Licensed Insolvency Trustees in Cobourg

Licensed Insolvency Trustees (LITs) are professionals licensed by the Office of the Superintendent of Bankruptcy (OSB). They provide advice and services to individuals and businesses with debt issues.

Tip: Be cautious of debt relief agencies that claim to offer consumer proposals, as only a licensed trustee can legally arrange and administer them.

Finding the Right Licensed Insolvency Trustee

When choosing an LIT, consider their experience, reputation, and the quality of their customer service. Look for testimonials from previous clients and ensure that the LIT is licensed by the OSB.

Other Debt Relief Options in Cobourg

Apart from consumer proposals, there are other debt relief options available, including:

  1. Debt Management Programs;
  2. Credit Counselling;
  3. Debt Consolidation Loans.

Each option has its pros and cons, and the right choice depends on your unique financial situation.

Frequently Asked Questions about Consumer Proposal in Cobourg

This section addresses common questions around consumer proposals in Cobourg.

What happens to my assets in a Consumer Proposal?

In a consumer proposal, you generally retain all your assets, which is not the case in a bankruptcy.

How will a Consumer Proposal affect my credit?

A consumer proposal will affect your credit score, but the impact is less severe than a bankruptcy.


A consumer proposal in Cobourg could be the lifeline you need to regain financial stability. However, it’s essential to understand the process, benefits, drawbacks, and alternatives before making a decision. Engage a reputable Licensed Insolvency Trustee to guide you through the process and ensure the best possible outcome.

Contact Us Today

We help Cobourg residents get out of debt with our government licensed consumer proposal services.