A consumer proposal is a formal arrangement which enables you to consolidate your debt and make an offer to your creditors to either modify your payments or repay only a percentage of what you owe. Creditors often accept consumer proposals because they allow them to receive more of the debt owed than a bankruptcy would. A proposal allows you a fresh start without going bankrupt.
Benefits of a consumer proposal
- You’ll likely repay only a portion of what you owe
- You can repay the debt in monthly payments over a period of time
- Your creditors are legally stopped from making any further collection efforts against you, and wage garnishments will end (with the exception spousal and child support garnishments)
- Interest charges stop once the proposal is filed
- In most cases, you’ll keep all of your assets including your car, your home and your RRSPs
How it works
Your Grant Thornton trustee will work with you to draft the best possible proposal that works for both you and your creditors. Your creditors will then vote whether or not to accept your proposal. In most proposals the amount you have to pay is made in monthly payments to Grant Thornton over an agreed upon period of time that is no longer than five years. However, you can make a lump sum payment or a combination of a lump sum payment and monthly payments.
Is it for you?
If you are not able to meet your regular payments as they become due but have sufficient income to pay something back to your creditors, you could qualify to offer payments under a proposal.
To learn more about a consumer proposal, and to decide if it’s your best option, meet with a Grant Thornton debt professional for a free, no obligation consultation, in person or over the phone.