FILING A CONSUMER PROPOSAL IN ONTARIO

Expert Debt Relief and Consumer Proposal Services in Ontario

Debt can become difficult to manage when interest charges, minimum payments, and household expenses compete for the same income. You may be making regular payments without seeing balances fall, relying on credit for daily costs, or receiving collection calls after falling behind.

Brief & Associates Inc. provides consumer proposal filings for residents of Ontario. As a Licensed Insolvency Trustee, we will review your debts, income, assets, and household budget, explain the available debt relief options, and help you decide whether a proposal fits your financial circumstances.

A consumer proposal may allow you to reduce eligible unsecured debt, stop further interest, and replace several creditor payments with one affordable monthly payment. Brief & Associates has helped individuals and business owners address financial problems since 1980, with a focus on respectful service, clear explanations, and solutions shaped around each person’s situation.

Signs You May Need Help with Your Debt

Financial problems do not always begin with a major event. Debt balances can grow gradually as interest accumulates, living costs rise, or income changes. Unexpected unemployment, illness, marriage breakdown, reduced working hours, or business difficulties can also make previously manageable payments unaffordable.

It may be time to speak with a Licensed Insolvency Trustee if:

• You can only afford the minimum payment on your credit cards or other debts.
• You use one form of credit to pay another.
• Collection calls or legal notices have started.
• A creditor is threatening or applying a wage garnishment.
• Your accounts regularly exceed their limits.
• You have been denied a debt consolidation loan.
• Your unsecured debts continue to rise despite regular payments.
• You cannot see a realistic way to repay what you owe.

Seeking advice does not commit you to filing a proposal or bankruptcy. A consultation gives you a clearer picture of your financial position and the options that may be available.

What a Consumer Proposal Is

A consumer proposal is a formal, legally binding arrangement between you and your unsecured creditors. It is prepared and administered by a Licensed Insolvency Trustee.

Under the proposal, you offer to repay a percentage of what you owe, extend the repayment period, or use a combination of both. The payment terms are based on factors such as your income, expenses, assets, debts, and what creditors could expect to receive through other insolvency proceedings.

A proposal can run for up to five years. Rather than making separate payments to several unsecured creditors, you make the single monthly payment to your trustee who then distributes the available funds among your creditors.

Once filed, the proposal generally stops interest on the included debts. It also activates legal protection that can stop collection calls, qualifying wage garnishments, and legal action by unsecured creditors.

How a Consumer Proposal Can Provide Debt Relief

A properly structured proposal can create a payment plan that reflects what your household can reasonably afford. The result may be a lower total repayment amount and a predictable payment schedule without ongoing interest.

Depending on your financial circumstances, a proposal may help you:

• Repay only an agreed portion of your eligible unsecured debts.
• Make one monthly payment instead of paying several creditors.
• Stop interest from increasing the included balances.
• Stop most collection calls and qualifying legal proceedings.
• Avoid filing for personal bankruptcy.
• Keep your assets while continuing payments on secured debts, such as car loans and mortgages.
• Pay the proposal commitment early without an early-payment penalty.
• Build a defined timeline for resolving your included debts.
• Filing a consumer proposal does not, by itself, prevent you from sponsoring eligible family members to immigrate to Canada.

The amount saved is not the same for every person. Creditors must receive an offer that they consider reasonable based on your finances and the alternatives available. Your Licensed Insolvency Trustee will assess what you can afford and help prepare an offer with a reasonable chance of acceptance.

Who Qualifies for a Consumer Proposal?

A consumer proposal is available to insolvent individuals. This generally means you cannot pay your debts as they become due, have stopped paying your obligations, or owe debts with a value greater than the value of your assets.

Your total debts must not exceed $250,000, excluding debts secured by your principal residence. If two people have shared debts, they may be able to file a joint proposal where their finances are closely connected.

You also need enough reliable household income to maintain the agreed payments. A proposal may not be suitable if your budget has no room for a payment or your income is too uncertain. In that situation, your trustee can explain whether bankruptcy or another option may offer a more workable result.

Eligibility alone does not mean that filing is the right choice. Brief & Associates reviews the full financial picture before recommending a course of action.

Debts That May Be Included in a Proposal

Most unsecured debts owed when the proposal is filed can usually be addressed through the proposal arrangement. These may include:

• Credit card balances
• Unsecured lines of credit
• Personal loans
• Payday loans
• Overdrafts
• Unpaid utility accounts
• Certain student loan debts
• Income tax and other eligible CRA debts
• Unsecured debts arising from a closed business
• Amounts owed to collection agencies

Income tax debt may be included, but outstanding tax returns generally need to be filed. You must also remain current with new tax obligations that arise after filing because a proposal only addresses debts covered by the filing; income tax or other debts incurred after your proposal is filed must be paid.

Secured debts are handled differently. A mortgage or vehicle loan is tied to an asset and is not normally reduced through a consumer proposal. You can keep the asset if you continue making the required secured payments and the payments are up to date when you file your proposal.

Certain obligations may survive a proposal filing and have to be paid in full. These ‘special’ debts can include court-ordered fines, support payments, debts resulting from fraud, and some student loans when the required period since leaving school has not passed. Your trustee will identify which accounts can be included so that you are fully informed of your specific situation.

The Consumer Proposal Process

The process begins with a confidential review of your finances. You will discuss your income, normal household expenses, property, secured obligations, and unsecured debts with a Licensed Insolvency Trustee or proposal administrator.

If a proposal appears suitable, the process generally follows these stages:

1. Review your debt relief options

Your trustee compares the proposal with other possible solutions, including continued repayment, credit counselling, debt consolidation, an informal settlement, and bankruptcy. You receive an explanation of the likely payment, timeline, benefits, and drawbacks of each relevant choice.

2. Gather financial information

You provide documents showing your creditors, balances, income, assets, and monthly expenses. Accurate information allows the trustee to prepare an offer based on your actual financial position. If you are unsure who your creditors are, you can obtain a free credit report from Equifax or Transunion.

3. Prepare the offer

The trustee develops proposal terms that fit your budget while giving creditors a reason to accept the arrangement. The offer may involve monthly payments, a lump-sum payment, or another approved schedule; a proposal can be crafted in any way that suits your specific situation.

4. Sign and file the documents

After you review and sign the documents, the trustee files the proposal with the Office of the Superintendent of Bankruptcy (the government insolvency regulator) and sends it to your creditors. The legal protection from unsecured creditor action begins upon filing.

5. Complete your responsibilities

Once the proposal is filed and accepted by the creditors, your obligations are mostly limited to making the required payments and completing two financial counselling sessions. Once all duties are completed, you receive a Certificate of Full Performance.

What Happens After Creditors Receive the Proposal?

Creditors have 45 days to review the offer. They may accept it, reject it, request changes, or ask for a meeting of creditors if the required voting threshold is met.

Voting power is based on the dollar value of each creditor’s proven claim. A creditor owed a larger amount has a larger share of the vote. Where a meeting is held, acceptance generally depends on a majority in dollar value of the creditors voting. If one creditor holds over 50% of the proven claims, that creditor has the ability to carry the vote.

Creditors sometimes request a higher payment or a longer repayment period. Your trustee communicates with them, explains the basis of the offer, and discusses proposed changes with you. You remain involved in any decision to amend the original terms.

When creditors accept the proposal, its terms bind all the unsecured creditors covered by the filing, including those that did not vote in favour. If the offer is not accepted, you may revise it, consider another debt relief option, or decide not to proceed.

Consumer Proposal Payments

There is no standard monthly payment for every proposal. Your payment is developed after reviewing your income, assets, household budget, debt level, family responsibilities, and the likely outcome for creditors if you filed bankruptcy.

Because a consumer proposal replaces multiple unsecured debt payments with one agreed payment, your new monthly payment may be significantly lower than the combined minimum payments you were previously making. This can free up room in your household budget for essential living expenses.

Payments can be spread over a period of up to 60 months. A longer term may reduce the monthly amount, while a shorter term can resolve the proposal sooner. Some proposals use a lump sum or irregular payment schedule when that better matches the person’s circumstances.

Common Consumer Proposal Payment Schedules

Consumer proposal payments can be structured around your income, household budget, and financial circumstances. The following are common payment schedules, each with different advantages and considerations.

Important: Consumer proposals can be paid off early without penalties. Choosing a 60-month payment schedule does not mean you must take the full five years to complete it. If your financial situation improves, you can make additional payments and become debt-free sooner.

A Licensed Insolvency Trustee at Brief & Associates will review your finances and help structure a payment schedule that is affordable, realistic, and acceptable to your creditors.

What happens if you miss a Consumer Proposal Payment?

Missing payments can have serious consequences. A monthly proposal will be deemed annulled after three payments in total are missed. When that happens, your legal protection ends and creditors may regain the right to collect the original debts, less any amounts they have received from your proposal. Contacting your trustee as soon as payment problems arise may leave time to discuss available remedies. If your financial circumstances change while the proposal is ongoing, it is possible to amend the terms, subject to creditor approval.

How Does a Licensed Insolvency Trustee get paid for Consumer Proposal

The trustee’s regulated administration fees are paid from the funds collected through the proposal. The trustee will not charge you a separate fee on top of your proposal payments. Once the proposal has been accepted, the payments will not increase regardless of future changes to income. Should your financial situation improve over time, you may choose to pay off your proposal commitment early.

How a Proposal Affects Your Credit Report

Filing a proposal affects your credit rating and appears on your credit report. This should be considered before you proceed, but many people seeking help have already experienced missed payments, collection activity, high credit utilization, or other damage to their credit history.

A registered proposal is removed from a credit report three years after it has been fully paid or six years from the filing date, whichever occurs first. Reporting practices and individual credit files may vary, so you should review your reports with both major credit bureaus.

A consumer proposal may have a less severe long-term impact on your credit history than bankruptcy. Both negatively affect your credit rating, but the reporting periods and consequences differ depending on your circumstances.

You do not have to wait until the record disappears to begin improving your financial habits. Making all ongoing obligations on time, keeping balances low, checking your reports for errors, and using new credit carefully can support gradual recovery.

The two required financial counselling sessions also provide practical guidance on budgeting, managing credit, recognizing financial warning signs, and planning for future expenses.

Consumer Proposal Compared with Other Options

The right debt relief solution depends on your income, credit history, assets, total debts, and ability to repay.

Debt consolidation loan: A loan combines several debts into one account. It may lower the interest rate, but you generally repay the full principal and must qualify with a lender. It can work when your debt is still manageable, and your credit supports approval.

Debt management plan: A credit counselling agency may arrange reduced or waived interest with participating creditors. You normally repay the full balance of your debts, and creditors are not subject to the same legal process used in a proposal.

Informal settlement: You or a representative may negotiate directly with creditors. Results can vary, and an informal arrangement does not automatically provide legal protection from every creditor.

Personal bankruptcy: Bankruptcy may resolve debts when a proposal payment is not affordable. However, the required payments, asset treatment, income reporting, duties, and credit effects differ from those of a proposal.

A Licensed Insolvency Trustee is required to explain the insolvency and non-insolvency choices relevant to your circumstances. Brief & Associates does not treat a proposal as the answer for every person. The goal is to identify a solution you understand and can realistically complete.

Why Work with Brief & Associates?

Brief & Associates Inc. has served people experiencing financial difficulties since 1980. We work with individuals and small to medium-sized businesses across Ontario.

Clients receive support from Licensed Insolvency Trustees and experienced insolvency staff who take the time to understand the circumstances behind the debt. The approach is based on respectful communication, straightforward explanations, and a custom assessment rather than a standard plan applied to every file.

For Ontario residents, we provide:

• A free, no-obligation consultation
• A review of all relevant debt relief options
• Consumer proposal preparation and administration
• Direct communication with included creditors
• Mandatory financial counselling
• Support throughout the payment period
• Guidance when questions or payment concerns arise

Request a Free Consumer Proposal Consultation

You do not need to choose a debt solution before asking for help. Start with a private conversation about what you owe, what you can afford, and what you want to protect.

Brief & Associates will review your finances, answer your questions, and explain whether a proposal, consolidation plan, bankruptcy, or another option may fit your needs. There is no obligation to file after the consultation.

Contact us to request a free debt assessment and take a practical first step toward resolving your debt.

Frequently Asked Questions

What Is the Downside of a Consumer Proposal?

A proposal will negatively affect your credit report and credit score. You must follow the agreed payment schedule and complete the required counselling sessions. Obtaining new credit may also be harder or costlier while the proposal remains on your file. Your trustee will explain these effects before you sign.

How Much Does a Consumer Proposal Cost in Ontario?

There is no fixed price because the offer depends on your debts, income, assets, expenses, and what creditors are likely to accept. Trustee administration fees are regulated and are paid from the proposal funds rather than charged separately after the payment terms are set.

Can I Keep My Home and Vehicle?

A proposal does not require you to surrender assets. You can generally keep your home or vehicle as long as you continue meeting the related mortgage or loan obligations. Equity and payment affordability will still form part of the trustee’s assessment.

Can CRA Debt Be Included?

Eligible income tax debt may be included. All required tax returns should be filed, and new tax amounts arising after the proposal must be paid when due. CRA’s voting influence will depend on the portion of your total unsecured debt that it holds.

Can I Pay My Proposal Off Early?

Yes. Consumer proposals can be paid early without a penalty. Early completion may also positively affect how soon the proposal is removed from an Equifax credit report, subject to the credit bureau’s reporting period.

Is a Consumer Proposal better then Bankruptcy?

A consumer proposal may be a better option than bankruptcy if you have enough income to make affordable monthly payments and want to avoid surrendering assets. It allows you to repay a portion of your unsecured debts, stop further interest, and keep your home, vehicle, and other assets while meeting any secured debt obligations.

A consumer proposal may also have a less severe long-term impact on your credit history than bankruptcy. However, bankruptcy may be more suitable if your income is limited, you have few assets, or you cannot reasonably afford proposal payments.