Consumer Proposal

A consumer proposal is a formal plan to repay your creditors a portion of your debt over a maximum of 5 years. As your Licensed Insolvency Trustee, Vine and Williams will help you develop a proposal to offer to your creditors.

What is a Consumer Proposal?

A consumer proposal is a formal plan to repay your creditors a portion of your debt over a maximum of 5 years. As your Licensed Insolvency Trustee, Vine and Williams will help you develop a proposal to offer to your creditors.

All collection action must stop immediately on the filing of the proposal. We notify your creditors and manage the voting process with them. You stop making payments to your creditors and make one regular payment to the Licensed Insolvency Trustee that you can afford. There are no added fees. You also attend two private financial counselling sessions to help you on your way to financial success in the future.

Repay a portion of your debt, get protection from creditors, keep your assets and avoid bankruptcy!

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Consumer Proposal Options in Ontario

The whole process can be handled remotely by phone, video and email due to the COVID-19 pandemic. We have offices in Mississauga, Oakville, Burlington, Hamilton, Stoney Creek, Hamilton Mountain, Ancaster, Hagersville, Caledonia, Brantford, St. Catharines, Niagara Falls and Welland.

How much does a consumer proposal cost?
Contact us today for a FREE confidential assessment.

Do You Have Consumer Proposal Questions?

Why would I choose a consumer proposal vs bankruptcy?

  • Proposal payments don’t change as they can in bankruptcy.
  • You know exactly how much you have to pay to finish, and you can pre-pay to finish early.
  • You remain in control of your assets – you can sell your house, sell or trade-in your car, inherit money, win the lottery, get a bonus or raise – it’s all up to you and yours to keep
  • You don’t have to report your income monthly as you would in a bankruptcy.
  • You keep your tax refunds, unlike a bankruptcy where they come to the trustee.
  • The impact on your credit report is less severe, especially if you have a previous bankruptcy.

How much do I have to pay?

  • The amount you offer to creditors depends on your income, assets, total debt, and household budget.
  • The proposal has to be better for your creditors than if you went bankrupt. That does not necessarily mean you have to pay more than you would in bankruptcy.
  • Every situation is different; your payment is not solely reliant on a percentage of your debts. We will work with you to develop a plan that you can afford.

Is my tax debt included?

  • YES – all tax debt is included – personal tax, HST, employee deductions (payroll deductions)
  • AND – any other government debts or overpayments such as EI, Canada Child Benefits, CERB, CRB, CEBA, CEWS, CERS, Ontario Works

What assets can I keep?

  • It’s your choice. The goal of a consumer proposal is for you to keep all of the assets you want to keep.
  • You can keep vehicles and houses as long as you can make the related payments.
  • You can voluntarily surrender assets like cars and houses that you no longer want and the shortfall on the debt goes into the consumer proposal.
  • Personal belongings and household effects are yours to keep up to generous provincial limits.
  • RRSP’s, TFSA’s, RESP’s, life insurance and other investments.

Does my spouse have to be involved?

  • Your consumer proposal does not affect your spouse. You don’t marry someone else’s debts.
  • If your spouse is a co-signer or guarantor of your debt, your consumer proposal doesn’t release your spouse from any liability and won’t stop any collection action against them. It only helps you.
  • Your spouse can make arrangements to continue paying the debt or considering filing their own consumer proposal or bankruptcy.

What does a consumer proposal do to my credit record?

  • The accounts included in your consumer proposal will be reported on Equifax and TransUnion with R7 ratings. There will be a note that you filed the consumer proposal.
  • An R7 indicates you have made an arrangement to settle your debts, and it is better than an R9 bankruptcy rating which can remain on your credit report for seven years in a first-time bankruptcy or 14 years if it is your second bankruptcy.
  • The R7 and record of the consumer proposal can remain on file for three years after completing your proposal. Equifax and TransUnion have their own policies and may remove the R7 rating sooner.
  • You can improve your credit score while you are in the consumer proposal, and we will show you how to rebuild your credit!

What debts can I include?

  • Your consumer proposal must include all of your unsecured debts. You can’t pick and choose.
  • Credit cards, lines of credit, loans, overdrafts
  • Government debt, including taxes and overpayments
  • Payday loans and lines of credit
  • Student loans (special rules apply, and you have to be out of school for over seven years for them for automatic discharge)
  • Bank “student loans” are included that are not government guaranteed.
  • Personal loans
  • Unpaid rent, utilities, phone bills
  • Don’t see it listed? Ask us!

Can you keep a credit card with a consumer proposal?

  • No, you must surrender all your existing credit cards when you file your consumer proposal. There is an exception for supplementary cards or ones given to you through your employer where they consent to let you keep the card.
  • You can apply for a secured credit card while you are in a consumer proposal and you should as this will help you repair your credit faster.
  • You will have to work to rebuild your credit score, as a consumer proposal does hold consequences on your credit report. You can successfully rebuild credit within a couple of years even though the proposal will be on your report for longer.

What are debts that are NOT included in Consumer Proposals?

  • All creditors are notified, but not all debts are discharged on completion. Some examples:
  • Child and spousal support
  • Court fines, penalties and restitution orders
  • Debts arising out of fraud
  • Student loans (direct government loans or government-guaranteed) if you have been out of school for less than seven years
  • Mortgages, vehicle loans and other secured loans where you choose to continue payments
  • Contracts like cell phones where you decide to continue the service

What are those “government programs” I see advertised to cut my debt by 80%?

  • This program is a consumer proposal, and there is no set amount that your debts can be cut by.
  • The Licensed Insolvency Trustee doesn’t decide how little you can pay. Your creditors get to vote and you need a majority of the dollars to vote in favour for it to pass.  We have years of experience and can recommend a payment that is fair to you and likely to be accepted by your creditors.  Don’t fall for the promise of a low payment only to face counteroffers from your creditors.  You can end of paying more than you need to if you fall for this bait and switch plan advocated by many debt consultants.
  • If you answer those ads, they may ask you to pay a fee to a consultant who will then refer you to a Licensed Insolvency Trustee. Only a Licensed Insolvency Trustee can file a consumer proposal for you, and you don’t need a referral. Consultations are always free, and there is no need to pay a consultant to help you. You need the Licensed Insolvency Trustee, you don’t need the debt consultant.

People We’ve Helped

  • Thanks for your help today. On what was turning out to be a pretty sad day, you made a big difference. For that I am grateful.

    Bob
  • Theresa was referred to me by a close friend. I can only state that my dealings with her have been professional, personable, goal-oriented and, in fact, delightful. Quite impressive I think given the difficult situation I have been in. I would welcome the opportunity to recommend Theresa and, hence, Vine and Williams, to any friend or acquaintance.

    Connie
  • I just wanted to thank you for meeting me last week. You made, what was for me a difficult situation, very comfortable.

    John
  • Words may not actually say what I want to say but I hope in some measure to convey my sincere thanks for all you have done for us. Thank you, thank you, thank you.

    Carol
  • I have been struggling with debts and student loans for many, many years after my divorce and felt overwhelmed… living on cash advances and hiding from creditors. Walter Williams took his time listening to my past struggles and how I ended up in this predicament, taking the time to lay out my options and answer any and all questions I had. I was so relaxed and content that what I was doing was the right thing for ME. Claiming bankruptcy was not the end of my life, but the beginning of a more confident and cautious time in my life.”

    Tracy