The Licensed Insolvency Trustee (LIT) will obtain information from you about your assets, your income and your debts. After completing an assessment of your financial situation, the LIT will suggest what you should offer your creditors. Since every person’s situation is different, the amount of the proposal is different for every person, so your proposal is customized to meet your needs.

If your proposal is approved, you will make the requirement payments directly to your LIT who then distributes funds to your creditor as set out in the consumer proposal.

How much of my debt will I have to repay under a consumer proposal?

The amount that you will have to repay in your consumer proposal will be determined in consultation with your trustee when they review your financial situation, taking into consideration what the LIT believes will be acceptable to your creditors. The amount proposed requires approval by your creditors. Typically, a consumer proposal will see the individual paying less than the full amount owing to the unsecured creditors.

What will my monthly payment be under a consumer proposal?

You are required to make regular payments, either a lump sum, periodic payments, or a combination of both. The terms of these payments are set out in your consumer proposal and your creditors must accept the terms. A consumer proposal can last last no longer than five years, and you can pay it off early. 

Will a consumer proposal cost less than a debt consolidation loan?

A consumer proposal will normally cost less than a debt consolidation loan because in a consumer proposal, you negotiate paying back only a portion of what you owe, and there is no ongoing interest charges. With a consolidation loan, you are borrowing directly from a lender and will be required to pay off the entire amount owing, with monthly payments determined by the lender. Consolidation loans also have interest charges during the life of the loan.

Learn more about consumer proposals