• Petition Information

 • Our Services
 • Dealing with Debt
 • Consumer Proposals
 • Mortgage Reinstatement
 • Role of the Trustee
 • What is a Paralegal?
 • Code of Ethics
 • GETTING HELP
FDM Journal
  • Consumer Proposals
  • Car Repossession
  • Debt Collectors
  • Foreclosure
  • Lay Offs
  • Trustees

Consumer Proposals

What is a Consumer Proposal?

A consumer proposal is a legal process that allows a debtor, an insolvent person or business, an opportunity to settle their debts without filing bankruptcy.

Your approved proposal stops Judgments and Garnishments and allows you to repay your debts as though they had been consolidated with a loan. This process is interest free and you may pay less than you actually owe. The balance of your debts are forgiven and reported to the Credit Bureau as "paid in full" A Consumer Proposal may work for some, and be a terrible waste of money for others.

If you are married, or living common-law and you both signed on the majority of the debt, you may file a joint proposal.

You may read more about Consumer Proposals in "Dealing with Debt: A Consumer Guide" published by the Office for the Superintendent of Bankruptcy. Our offices carry this guide, contact the one nearest you.

What is an Informal Consumer Proposal?

At Par-O-Law we negotiate settlements with your creditors outside the Court. We negotiate directly with your creditors to arrange a suitable repayment plan which accommodates your current financial situation. We are frequently able to settle debts at zero interest.

This process is called an Informal Proposal. If you only have two to five creditors, this option may best suit your needs.

NOTE: Student loans are normally owed to three creditors; the federal government, the provincial government and the bank risk portion. The bank risk portion may not be protected by legislation, it may have the same status as a credit card debt.

When can I make a consumer proposal?

If your total debt is more than $10,000.00 and less than $75,000.00 excluding the mortgage on your home, and you cannot meet your monthly payments, you can make a consumer proposal to your creditors.

If your total debt exceeds $75,000.00 not counting your home, you may still make a consumer proposal but in these cases if your proposal is rejected by your creditors you are automatically bankrupt. Par-O-Law Canada Inc. has a fiduciary responsibility to its clients to protect their assets against seizure and sale by a trustee in these cases.

If you filed bankruptcy and were not told about a proposal as an option you may still make a proposal and withdraw from your bankruptcy. The conversion usually requires the approval of inspectors (this is a technicality which Par-O-Law Canada Inc. addresses on your behalf).

Ask for a free consultation to determine if a consumer proposal would help your situation.