Common Questions About Filing Consumer Proposal In Ontario

Ontario Consumer Proposal FAQs

Are you thinking about filing a consumer proposal in Ontario as a way of gaining debt relief?

Here are the answers to some of the most frequently asked questions about this decision.

There are numerous ways to claim debt relief in Ontario.

You could explore a debt settlement or you might even think about debt consolidation.

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If you want to reduce the debt you need to pay back but you don’t want to file for bankruptcy, a consumer proposal will always be the best choice.

Many people do tend to struggle to understand what a consumer proposal is and what it really means for the individual.

It’s important that you know how it’s going to affect you and crucially, your financial future.

It’s not quite the clean slate many hope for but it does provide a lot of benefits.

Let’s take a look at some of the answers to a few common questions and dispel the myths that often surround this debt relief option.

What Exactly Is A Consumer Proposal?

This is a legal process that you can access as a way to gain relief from your debt.

Essentially, you will build an offer to put forward to creditors.

This will be based on what you can realistically afford to pay in terms of the debt that you owe.

You’ll also typically seek to extend the time that you have to pay the debt.

This will be filed by a licensed insolvency trustee and it is filed through the Office of the Superintendent of Bankruptcy.

What Creditors Are Included Within The Proposal?

The proposal will be presented to all creditors you owe unsecured debts to.

As such, it won’t include things such as your mortgage.

It’s a requirement that you ensure that every creditor is included and that all your creditors are treated in the same way.

There are numerous examples of unsecured debts that could be impacting you. This includes:


  • Overdrafts;
  • Credit cards;
  • Short term loans.


If you are having issues paying for things like your mortgage, you’ll need to speak to the lender separately to seek a resolution.

How Much Will You Need To Pay Back?

This depends on your situation.

However, the amount will always be more than creditors would get back in the event of a bankruptcy.

You have to make sure that it’s valuable to them.

Remember, creditors want to get as much back as possible from the debt that you owe.

Your trustee will help you calculate the right amount based on everything from your earnings to the assets that you can currently access.

Ideally, you should be aiming to pay as much back as possible.

Does This Option Cost Money?

No, not in the typical sense.

While there are administration fees, these come out of the proposal itself.

As such, there will be no extra fees that you need to worry about paying.

As well as this, the consultation for a consumer proposal is typically going to be free of charge.

How Long Does It Take?

The proposal will occur in stages.

First, it will be filed and creditors then will have 45 days to vote on the proposal.

As soon as a proposal is filed all debt collection must cease.

This is a big benefit because it should help eliminate some of the stress you may be feeling with regards to your debt.

If the creditors vote to approve the proposal, then there will be a 15 day waiting period for the court to grant it.

After it has been fully approved, most people can complete the process within about 5 years.

If possible, you should be looking to complete it earlier than the agreed time.

This will improve your reputation with creditors and ensure that you can start building back up your credit rating.

How Long Will It Remain On Your Credit Report?

A consumer proposal in Ontario will remain on your credit report for three years in total, once you have completed the proposal.

It’s worth pointing out that this is significantly less than bankruptcy.

Do You Get To Keep Your Assets?

Usually, in the case of a consumer proposal, you will get to keep your assets and this is another major benefit over bankruptcy.

This will be the case as long as your creditors accept the full terms of the proposal.

You should however always speak to your trustee about how a consumer proposal could impact your assets or investments specifically.

Remember, car payments and mortgage payments are not impacted at all.

As long as you continue to make payments on the property, then you won’t lose your home or if you are making vehicle payments, your car.

How Do You Recover?

When you have completed your consumer proposal, you will receive a certificate of full performance.

You can essentially see this as a blank slate and you will be able to start rebuilding your financial position as well as improving your credit ratings.

You will need to show creditors that you can borrow money and repay it.

You do need to make sure that you attend financial counsel sessions.

At least two sessions are completely mandatory and will be highly beneficial to you.

You’ll learn how to manage your income and ensure that you do stay in the green.

You may also want to think about using a secured credit card.

The credit card is secured through a deposit that then becomes the credit limit.

If you use this card to pay bills, you will quickly be able to rebuild your credit rating once you have filed a consumer proposal.

Are you thinking about utilizing this option as a way to gain debt relief in Ontario?

If so, we can help.

If you contact one of our experts they will evaluate your financial position and help you determine whether a consumer proposal is a right choice for you.

The aim here will always be to make sure that you gain the right benefits from the path you take to debt relief.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal

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