Consumer Proposal Toronto

Understanding Consumer Proposal Services in Toronto

Experiencing financial hardship is a universal struggle, but you’re not alone. A considerable number of Canadians regret the amount of debt they’ve taken on, with a significant portion admitting to having issues repaying their debts. If you’re based in Toronto and find yourself in a similar situation, a consumer proposal might be your best solution.

What is a Consumer Proposal?

A consumer proposal is a legally-binding agreement between an individual and their creditors to repay a percentage of the overall debt owed. This debt repayment plan, established under the Bankruptcy and Insolvency Act, is typically administered by a Licensed Insolvency Trustee (LIT) on behalf of the debtor.

The LIT negotiates with creditors to develop a proposal for repaying a portion of the total debt over a period of up to five years. The specific repayment amount depends on the debtor’s financial capability and the agreement with the creditors. In many cases, a consumer proposal can reduce total debt by up to 75%.

Popularity and Acceptance of Consumer Proposals in Toronto

In recent years, consumer proposals have soared in popularity as an alternative to bankruptcy, especially in the Greater Toronto Area (GTA). In 2021, nearly 8,400 individuals in the GTA filed consumer proposals for debt relief, substantially outnumbering the 2,300 individuals who filed for personal bankruptcy.

These numbers underline the growing preference for consumer proposals over bankruptcy. It’s particularly appealing because of its potential to retain valuable assets like homes and cars, which can be threatened under bankruptcy.

245 Fairview Mall Drive, Suite 720, North York (Don Mills/Don Valley Parkway & Sheppard), Ontario M2J 4T1

Toronto Consumer Proposal Office

Pros and Cons of Consumer Proposals

Like any debt solution, a consumer proposal comes with its own set of advantages and drawbacks.


  1. Debt Reduction: Consumer proposals can significantly reduce your total debt, often by up to 75%.
  2. Fixed Monthly Payments: Your payments are agreed upon upfront and are based on your budget, ensuring affordability.
  3. Asset Retention: Unlike bankruptcy, a consumer proposal allows you to keep all your assets.
  4. Legal Protection: Once accepted, proposals are legally binding, stopping creditor actions like collection calls, lawsuits, and wage garnishments.


  1. Limited Scope: A consumer proposal does not deal with secured creditors.
  2. Eligibility Restrictions: Not everyone is eligible to file a consumer proposal. You must be insolvent to be eligible.
  3. Credit Impact: Filing a consumer proposal does negatively affect your credit.

Eligibility for a Consumer Proposal in Toronto

To qualify for a consumer proposal, your total consumer debt must be $250,000 or less, excluding the mortgage on your principal residence. Additionally, you must be unable to pay your debts as they become due or have stopped making payments.

Types of unsecured debts that can be included in a consumer proposal include credit card debt, bank loans, payday loans, income taxes, and other Canada Revenue Agency debts. Student loans can also be discharged through a consumer proposal if you’ve been out of school for 7 years.

Making a Consumer Proposal in Toronto

The process of making a consumer proposal in Toronto involves several steps:

  1. Contact a Licensed Insolvency Trustee for a free debt assessment.
  2. Meet with your trustee to review your debts, budget, and assets to determine your proposal offer.
  3. Sign the necessary documents that include your proposal offer.
  4. Your trustee files your proposal with the government, effectively halting all creditor actions.
  5. Your creditors have 45 days to vote on accepting or rejecting your proposal.

Consumer Proposal Cost

The cost of a consumer proposal depends on your unique financial situation. There are no upfront or additional fees. The amount your creditors agree to accept is what you pay. Trustee fees are paid out of the settlement offer before monies are distributed to your creditors.

Impact of a Consumer Proposal on Your Credit

A consumer proposal will stay on your credit report for a maximum of 6 years from the date you filed or 3 years from the date of completion, whichever comes first. You can start to rebuild your credit, including getting a new credit card, even while in your proposal.

Concluding Thoughts

Navigating through financial turmoil is challenging, but you don’t have to do it alone. A consumer proposal in Toronto can be a viable solution if you’re struggling with debt but want to avoid the ramifications of bankruptcy. The process allows you to pay off your debt in a manageable way while keeping your assets. Always remember to seek professional help to understand your options and select the one most suitable for your financial circumstances

Contact Us Today

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