How to Interview Your Consumer Proposal Administrator

If you are thinking about going through a consumer proposal administrator, then you will have a lot of questions that you need to ask.

After all, you need to find out if a consumer proposal is a good fit for you and you also need to find out if there are any other alternatives available.

If you want to find out more, then simply take a look below.

We will tell you everything you need to know.

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Is your Budget a Good Fit for a Consumer Proposal?

If you are considering whether or not a consumer proposal is a good fit for you, then it helps to look at your budget.

Find out how much you think you can afford to spend on a debt repayment plan every single month and also review your income.

Your licensed insolvency trustee should be able to help you with this, and they can also help you to find out how many regular payments you will need to make too.

If you think that you may be able to afford to offer a deal to your creditors then a proposal may be a good option, but again, your insolvency trustee needs to be the one to help you make this decision.

Is a Consumer Proposal the Best Option?

It’s important to know that they are not better than bankruptcy, but they are different.

For example, when you look at bankruptcy, you will soon find that it is much stricter, and it requires regular reporting of your income overall.

You also need to report your expenses too.

The proposal is subject to fewer rules and conditions too.

Consumer proposals take much longer to complete and they can cost more than bankruptcy too.

When you look at the credit score part of things, you will see that it affects your credit score.

Bankruptcy scores an R9 on your Equifax report.

A consumer proposal is an R7 rating, so this is a huge improvement even though you will end up paying more overall.

Will your Creditors Accept the Deal?

Creditors will have a total of 45 days to vote on your proposal.

During this time, they will be able to reject, counteroffer or accept your deal.

You need to ask your insolvency trustee to see if they can review who you owe money to and if they have experience with how creditors operate.

They will be able to tell you how they vote as well.

You need to understand how creditors generally vote in a lot of cases.

Every dollar owed to a creditor is the equivalent to one vote for your proposal.

If you know that a creditor has more than half of the dollars owed, then you need to pay attention to the votes.

A creditor who has most of the votes may actually be in control of whether or not your proposal is accepted.

A lot of proposals are accepted as filed, or they happen to be presented with a counteroffer.

You need to ask your insolvency trustee to see if they are going to respond to it with their own counteroffer or if they are going to try and come to a mutual agreement.

Your insolvency trustee should be able to talk you through all of this, so make sure that they are willing to when you conduct the interview.

Is the Consultation Free?

Another question that you need to ask is if the consultation is free, and if you need to pay upfront if the consumer proposal goes ahead.

The meeting itself is no charge and the first payment should not be taken until after signing.

The fees that the insolvency trustee is allowed to charge will be outlined by the government.

The fee that you pay should also come out of the consumer proposal payment.

Debtors should not be making any additional payments to the trustee, and this includes any upfront payments.

All licensed consumer proposal administrators will work in this way but if you are dealing with a debt advisor then they can operate as they wish.

Your maximum payment arrangement will be 5 years and creditors cannot ask you to extend the offer beyond this point.

Remember that you always have the option of speeding things up too.

Why Should I Choose a Consumer Proposal?

The most common reason why you would accept a consumer proposal instead of going ahead for bankruptcy include your assets, your history or your current employment.

Sure, your assets vest with your insolvency trustee during the bankruptcy, but this is not the case with a consumer proposal.

When you face bankruptcy, if you earn more money, then it is very likely that you will pay more.

Once the voting period has ended, you will then pay a fixed amount.

Of course, you can earn extra income and you won’t be subjected to any penalties either.

Some employment situations will mean that you cannot face bankruptcy, but you will always be allowed to file for a consumer proposal.

If you have been bankrupted before then there’s a chance that a proposal may be the better solution overall.

The bankruptcy itself will be longer.

You should expect a term of 24 to 36 months, if your income is good.

Your credit report will display the information for a much longer period of time and a penalty of 14 years will apply.

A consumer proposal will disappear from your report around 3 years after your first proposal payment has been made.

If you are not sure if a consumer proposal is right for you then your insolvency trustee should be able to help.


If you aren’t sure which direction you should be taking with your consumer proposal or your bankruptcy, then contact Bankruptcy Canada to find out more.

When you do, we can then work with you to make sure that you are given the support you need throughout the entire process.

You can contact us by phone or by email at any time you need.

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

Gordon Sands

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