Joint Consumer Proposal: Advantages & Disadvantages

A consumer proposal filed by two or more persons is called a Joint Consumer Proposal. It works the same way as a regular proposal except that it covers the debts of both partners.

To qualify for a joint filing the majority of the debts have to be joint. This means that the loans, credit cards, and other debts have to have both names on the agreements. Ideally, 90% or more of the debts have to be joint.

Here’s a diagram of how this may look like:

joint consumer proposal filing

Advantages and disadvantages of joint filing

The main advantages of a joint consumer proposal are:

The debt limit increases to $500,000 ($250,000 x 2 partners)
The cost of administering the proposal is slightly lower as it’s only one single file, which means more money will go towards paying off debts.
All debts are dealt with together, and your family budget can be planned more effectively.

The main disadvantages:

  • The R7 rating will be posted on both parties credit files
  • Both applicants are fully responsible for the proposal – if one party loses their job the other partner is still liable to pay the full proposal amount in order to successfully complete it.
  • The final disadvantage depends on the relationship between partners. If for some reason they separate during the proposal or one person can’t or won’t contribute towards the payments, the other applicant will suffer the consequences as they would remain liable for the full proposal amount.

Final thoughts

It’s important to note that no one can be forced to file a proposal or bankruptcy. Essentially there are five possible resolutions when it comes to solving the family debt crisis:

  • Partners can file separate proposals
  • Partners can file a joint proposal
  • Partners can file bankruptcy (separately)
  • One party can file bankruptcy and the other proposal
  • One party can file proposal or bankruptcy while the other does not file anything and continues as is.

If you’re overwhelmed by debt and tired of living from minimum payment to minimum payment – give us a call for a free, no obligation consultation. It’s a perfect opportunity to obtain more information and find out what options are available for your particular situation.