The consumer proposal disadvantages Ontario residents need to be aware of are straightforward, but they matter when deciding if this option is the right fit. Even though a proposal offers strong protection and real savings, it isn’t perfect for everyone.
This page explains the drawbacks in clear, simple terms so you can make the best choice for your situation.
A consumer proposal reduces your debt, but you must still make monthly payments. Your credit rating is affected while the proposal is active, and creditors may ask for small adjustments before they accept your offer. Understanding these limitations helps you see whether a proposal matches your financial goals.
Consumer Proposal Debt Relief
A proposal lowers what you owe, but you must continue making one monthly payment. If payments stop for too long, the proposal can be cancelled. A steady income is helpful, even though your payment will be far more manageable than before.
Your credit rating will show an R7 while the proposal is active. This is temporary, but it can limit borrowing for a period of time. Many people still rebuild their score during the proposal through simple tools and good habits taught in counselling.
A consumer proposal usually lasts three to five years. Bankruptcy is often faster, but it has more serious long-term consequences. A proposal trades speed for stability and protection, but the longer timeline is still something to consider.
You must owe less than $250,000 in unsecured debt (not including your mortgage). If you owe more, the trustee will explain other options that still offer strong protection.
Creditors vote on your proposal. Sometimes they ask for small changes before accepting it. Your trustee handles all communication, so you never deal with creditors directly, but the process may still take some discussion.
If someone co-signed a loan with you, a proposal does not remove their responsibility for the debt. They may still be contacted about the remaining balance. The trustee will explain how to manage this so everyone understands their options.
All unsecured debts, credit cards and unsecured loans can be applied to a consumer proposal, getting you completely debt free in 5 years or less!
This consumer proposal calculator shows an approximate of how much you could save.
If you’re feeling overwhelmed by debt and not sure where to start, the best thing you can do is talk to someone who understands.
Call now and speak directly with me — Kelly Dey — for clear, honest advice that’s tailored to your situation. There’s no pressure and no judgment. We’ll look at your options together and create a plan that helps you breathe again. Getting started is easier than you think, and one simple conversation can put you back in control of your money and your life.
Let’s take that first step today, call 905-721-7506.
A. No. While your credit is affected during the proposal, many people rebuild before it ends. With steady payments and simple credit-rebuilding steps, scores often improve faster than expected.
A. Yes, but most proposals are accepted. If creditors request changes, the trustee will handle all discussions and help find a fair solution.
A. Missing a single payment won’t cancel the proposal. The trustee will explain your options and work with you. Only repeated missed payments over time put the proposal at risk.
Insolvency Trustee – Kelly Dey
If you’re feeling weighed down by money or debt issues, give me a call at 905-721-7506 and lets just have conversation.
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Nadia Stevens
4 days ago
★★★★★ I was worried about the negatives of a consumer proposal, especially the effect on my credit, but it was still the best choice. My payments dropped, the interest stopped, and I finally had room to breathe again.
Leo Carver
1 week ago
★★★★★ I knew the proposal would show on my credit, but the advantages outweighed the drawbacks. My creditors stopped calling the same day, and my monthly payment became something I could actually manage.
Jasmine O’Reilly
2 weeks ago
★★★★★ I didn’t love that the proposal lasts a few years, but the protection was worth it. No more garnishment, no more stress, and I kept my car and my job. I feel like I have my life back.
Rise Above Your Debt!
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