How do I file a consumer proposal?

During your consultation, one of our debt solutions professionals will work with you to assess your financial situation and recommend the best option for settling your debt. If a consumer proposal is your ideal solution, your debt solutions professional will analyze your income and expenses in detail and estimate a payment amount based on your financial situation. The first appointment is always free, confidential, and judgment-free.

During the next step, we’ll prepare the necessary documents needed to submit a formal offer to your creditors to settle your unsecured debt, which you’ll review beforehand. At this stage, we may ask you to provide additional documentation to confirm your creditors, debt owed, and/or your income.

Once you’ve reviewed and signed your consumer proposal, your LIT will file the proposal with the Office of the Superintendent of Bankruptcy Canada (OSB). 

After filing your proposal, you‘ll stop making payments directly to your creditors, collection calls will stop, and creditors can no longer garnish your wages or take legal action against you for your debt.

Your creditors have 45 days from the filing date of your proposal to either approve or reject the terms. Typically, creditors will agree to the terms because, in a proposal, you’ll repay more of what’s owed to them, compared to bankruptcy.  

However, if your creditors are unhappy with the proposal, your LIT may renegotiate the terms. The majority of your creditors must accept the terms of your proposal for it to be approved. If they reject your proposal, our debt solutions professionals will explore other options with you.

Once your proposal is signed, you’ll be required to make either a lump sum or monthly payment to your LIT, who will repay your creditors on your behalf. 

You‘ll have up to five years to repay your debt; however, you can pay off the outstanding balance at any time and complete the process early. 

You also must attend two financial counselling sessions and meet any other conditions in the proposal.

Once you’ve completed the proposal terms, you can start rebuilding your credit and living debt-free.

LITs are the only federally regulated debt professionals qualified to offer solutions such as bankruptcies and consumer proposals. When you choose a LIT, you can be assured that you’re dealing with someone who‘s proven they have the knowledge, experience, and skills to help you make an informed decision about your finances.