Consumer Proposals

A consumer proposal for many people is the number one alternative to bankruptcy in Ontario.  Here’s how it works:

You work with an Ontario Consumer Proposal Administrator (who is licensed by the federal government) to prepare the proposal.  A proposal is deal that is negotiated with your creditors (the credit cards and other companies you owe money to).  Here’s a simple example:

You owe $60,000 on various credit cards, bank loans, payday loans, and even income taxes. You can’t pay the full amount owing, but you can afford to pay something each month, and you don’t want to go bankrupt.  The creditors may agree to a proposal where you pay $400 per month for 60 months; they each get their share of the money, and they agree to write off the remaining balance.

You make one payment, and your debts are eliminated, and you didn’t go bankrupt.

In a typical proposal you may end up paying back about a third of the full balance owing, so if you owe $60,000, your proposal may be for $20,000, generally spread over three to five years.  Of course each situation is different; some proposals will be for more or less, depending on your situation.

Even better, it is not necessary for all creditors to agree.  Each creditor gets one vote for each dollar they are owed, and if more than half of the dollars vote yes, all creditors must accept the proposal (even the ones that voted no).

For more information, and to see if a consumer proposal is the correct solution for you, contact an Ontario Consumer Proposal Administrator for a no charge initial consultation.

More FAQ on consumer proposals.

{ 13 comments… read them below or add one }

Judy C. October 17, 2013 at 1:02 pm

My wages have just been garnisheed by the Ontario Superior Court of Justice. This for a student loan that I had made in the 1990’s. I last made a payment in January 2012.
I am 64 years old and suffered a heart attack in May 2011. Getting my bills caught up since then has been a challenge. Now that my wages have been garnisheed, I can’t afford to pay my bills or rent, never mind buy food.
I received notice of this garnishment from an email from payroll at work. I did not receive any such notice from the courts for another week, after the fact.
Twenty percent of my pay is being taken until $19,000 has been paid. This started with my July 30, 2013 pay. I’m struggling here and don’t know where to turn.


J. Douglas Hoyes October 21, 2013 at 4:51 pm

You should immediately contact a bankruptcy trustee to review your options. There are only three ways to stop a wage garnishment:
1. pay the amount owing, or make an arrangement with the creditor;
2. file a consumer proposal
3. file bankruptcy

The correct option for you will depend on a variety of factors, including your expected future income, so the sooner you contact a trustee the better to review your options and stop the garnishment.


amanda g. November 4, 2013 at 2:13 pm

I own 8,000.00 on a credit card and approx. 30,ooo.00 for a car loan. would I be considered for a consumer proposal?


J. Douglas Hoyes November 12, 2013 at 7:51 am

Yes, you would be eligible to file a consumer proposal. Whether or not it will make sense for you will depend on your income, and whether or not you want to keep the car.

I suggest you contact a consumer proposal administrator for a no charge initial consultation to review your situation. Here’s the link:


Cathy December 11, 2013 at 8:07 am

I have a joint mortgage and credit card with my husband, I know secured debt cannot be included, but I do not want this joint credit card included as well. Will my applying for a consumer proposal affect his credit rating. All other debt is in my name alone, he does not know anything about I. I have become sick and cannot keep these payments up.


J. Douglas Hoyes December 12, 2013 at 5:08 pm

If you file a consumer proposal, and he continues to make all of the payments on the joint credit card, it should not impact on his credit rating.

Since a consumer proposal is a legal process, you are required to include all debts, so you would list the joint credit card in your proposal, but presumably your husband would continue to make the payments on it, and since he is making the payments it should not impact his credit rating.


Joanne C. March 1, 2014 at 2:08 pm

I paid off the Consumer Proposal on June 12, 2011; I understand that it still stays with me for 3 yrs after I’ve paid off the Proposal (which I did in 3 yrs instead of 60 months). I have 2 Master Cards thru Canadian Tire (one has a $7,000 credit limit and the other has a $4,500 credit limit). Both credit cards have a small amount owing on them ($500 & $400). When can I expect my credit rating to be back to normal so that I don’t have double digit interest rates on a car that I hope to buy in a year or so?


J. Douglas Hoyes March 8, 2014 at 4:51 pm

You are correct that the credit reporting agencies in Canada automatically purge the note saying you have filed a consumer proposal three years after the proposal is completed, so in your case that should happen in June 2014. Because you have re-established credit, your credit score should be in good shape in June 2014, or shortly thereafter.

Whether or not you can borrow at good interest rates will depend not only on your credit score, but also your income and the amount you are borrowing, but I would expect that you should not have any problem getting a loan at a decent interest rate by this summer.


Allan April 16, 2014 at 9:49 am

I am retired and divorced. Due to reoccuring injuries I can’t work part time.
I owe approx $21000 to three credit cards. The government is fighting to get another $14000 due to tax credits from past that they say were illegal. I collect a company pension $1000 and Canada work pension $250 I am 61.
I should say my mortgage and other bills equal around$1200. I am in the hole each month.
Any ideas.


Al April 30, 2014 at 4:34 pm

Hello, I owe about $38000 in debts + $16000 in student loans. If I file a proposal, will I lose the my house? I don’t have enough equity and the house is under my name and my wife’s name. Debt is all under my name. Thanks


Pat wood June 16, 2014 at 12:25 pm

Hi – I owe Revenue Canada $20,000 and $30,000 credit cards plus I lease a car for $800/month – I am on pension -am I qualified to do debt proposal?


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seta September 11, 2015 at 2:29 pm


How do i get in touch with an agent to start a consumer report for my debts? i live in kitchener ontario…if there is an office here that would be very helpful to me to get the ball rolling on this matter..Thank you:) i can also be reached at 519-496-2206 in the evenings.


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