Self-Employed and Considering a Consumer Proposal? 5 Things You Need to Know

Can I Make a Consumer Proposal if I’m Self-Employed?

Being self-employed can make a person’s finances far more complicated than those working in normal jobs.

Not only do you have to handle all of your taxes and accounting, but you also have to deal with restrictions placed on the financial services that you’re able to use.

This can cause a lot of confusion for those working for themselves with mounting debt, especially when it comes to choosing the best debt relief option.

A Consumer Proposal is a document that is submitted to your creditors to negotiate the terms of your repayment plan.

This can enable you to extend the term of your loans, escape crushing interest rates, and will give you legal protection as you work to solve your financial problems.

Of course, though, what do you need to think about as you approach this sort of option when you’re self-employed?

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#1: Will You Qualify For A Consumer Proposal?

One of the first things you need to establish when you’re trying to file a consumer proposal is whether or not you will qualify for it.

Not everyone can use this method to support their debt relief, making it tricky to figure out whether or not you will be able to use it when you’re working on your own finances.

To start, you can only file a consumer proposal if you can’t pay your debt back by selling your assets, though the amount of debt you have will also impact this.

You need to have less than $250,000 in debt, and this means that this option will often be unsuitable for those who are struggling with loans like mortgages.

#2: Will Your Assets Be Protected?

Those who work for themselves are often incredibly reliant on the tools they use for their job.

Without them, you simply wouldn’t be able to make money, and this means that you need to make sure that they will be protected if you want to continue working on a self-employed basis.

Thankfully, when you file a consumer proposal, all of the assets you use to make money will be protected.

This is helped by the fact that a consumer proposal will initiate a stay of proceedings, preventing your creditors from taking you to court.

#3: Does The Tax Man Still Have Power?

It can be hard to pay all of your taxes when you work for yourself.

Difficult months can easily become hard years, and any money you owe to the government will rapidly grow with fines and interest.

The CRA doesn’t offer loans or secured debts, and this means that they will often be very aggressive when it comes to getting their money back, putting huge amounts of pressure on those who can’t pay.

Your tax debt can be included in a consumer proposal, though this doesn’t mean that you will be out of the danger zone once you file one.

It can be hard to convince the CRA to agree to something like this, making it crucial that you have a team like Bankruptcy Canada behind you to make sure that it all goes smoothly.

#4: Should You Stay Self-Employed?

Many people worry that they will have to flush their business down the toilet when they file a consumer proposal.

Thankfully, this isn’t the case, and you will be allowed to keep working on a self-employed basis for as long as you like.

It’s important to consider the sense in this, though, as many people find that being self-employed is what led to their financial problems in the first place.

It can be hard to get paid when you rely on this sort of income, and many self-employed people find themselves struggling to keep up with their debt.

Regular jobs don’t come with this sort of issue, with a guaranteed paycheck coming to you each month and loads of other benefits for you to take advantage of.

Filing your consumer proposal could be an excellent time to start thinking about getting yourself into employment, though it doesn’t have to be.

#5: It Gets Harder Before It Gets Easier

Consumer proposals are designed to it easier to manage and pay back the money you owe, but this doesn’t mean that this process is going to be easy.

It’s important to consider that you’re going to have to find the money you’ll be paying back, and this may mean that you have to cut things out of your life that you usually buy.

Some people will find this easier than others, but this is another area that Bankruptcy Canada can help you with.

These challenges will be well worth the work once you get to the end.

Having met the terms agreed in your consumer proposal, you will be free to use and manage your money how you like again, only you won’t have loads of debt to contend with.

Our dedicated team is happy to help you to cement your financial future, giving you the tools to continue moving in exactly the right direction.

Learn More From a Licensed Consumer Proposal Administrator

Here at Bankruptcy Canada, we’ve spent more than 20 years working with clients in all sorts of different positions.

We understand that it can be hard to manage this side of your life when you work for yourself and have worked incredibly hard to ensure that we can take the pain out of it for you.

You can get in touch with our friendly team by calling at 1-877-879-4770 or sending an email to, and we’ll be eager to offer confidential and obligation-free support to get you through the consumer proposal process.

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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