Consumer Proposal

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

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

A consumer proposal is a formal plan to repay your creditors a portion of your debt over a period of up to 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 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 your proposal account. 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.

As a result of the COVID-19 pandemic, the whole process can be handled by phone, video and email … from the safety of your home!

Want to know more? Contact us for a free confidential assessment.

Consumer Proposal FAQ

Why would I choose a consumer proposal rather than bankruptcy?
  • Proposal payments don’t change like they can in a 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 like 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 is dependent on your income, your assets, your total debt and your 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 a bankruptcy.
  • Every situation is different and your payment is not just based 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
  • AND – any other government debts or overpayments such as EI, Canada Child Benefits
What assets can I keep?
  • It’s your choice … the goal in a consumer proposal is for you to keep all of the assets that 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 in to 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 their own arrangements to continue to pay the debt, or consider 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 7 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 3 years after you complete your proposal.  Equifax and TransUnion have their own policies and may remove the R7 rating sooner.
  • You can work on improving 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 7 years for them to be automatically discharged)
  • Bank “student loans” that are not government guaranteed are included
  • Personal loans
  • Unpaid rent, utilities, phone bills
  • Don’t see it listed … ask us!
What debts are not included?
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 7 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 is a consumer proposal and there is no set amount that your debts can be “cut” by.
  • If you answer those ads, you may be asked 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.

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.

  • 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.

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

  • 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.

  • 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.”