Consumer proposals are a government approved debt forgiveness program.
In a consumer proposal, an agreement is made to pay unsecured creditors a percentage of what’s owed.
Once a proposal is accepted, the balance of the debt (many times a minimum of 70%) is forgiven. The payment of the balance is based upon what you can afford to repay over a 3 to 5 year period.
Consumer proposals give you relief from your debts and avoid you having to consider filing for bankruptcy.
In a consumer proposal, the debtor (the person who owes the money) agrees to:
The amount repaid is determined by a proposal administrator (trustee), based upon the financial situation of the debtor.
Creditors and lenders agree to:
The consumer proposal consolidates all unsecured debt reducing it to one lower payment.
Consumer proposals reduce the amount you owe on debt and unsecured credit.
Many times the amount of debt can be consolidated up to a minimum 70%. For example:
Consumer proposals are a debt management plan that provides debt help, reducing and consolidating your debts, without fees or additional interest applied.
Consumer proposal payment plans pay off unsecured debt (including credit card bills) in 3 to 5 years.
Consumer proposals apply to unsecured credit.
Unsecured Debt is credit or a loan where the lender cannot seize or have a claim against the item purchased. For example an item purchased using a credit card or personal loan cannot be seized if you are unable to make payments. A Consumer Proposal is designed to help people with this type of unsecured debt.
Secured Debt is any loan that was obtained with collateral or something tangible being tied to the debt, like a home mortgage or auto loan.
All unsecured debts and credit cards that are not secured, can be applied to a consumer proposal.
Consumer proposals do not apply to secured credit.
Secured credit is credit received for property like mortgages and car loans (loans that are tied to an asset like a vehicle or property).
Secured credit is debt such as:
Consumer proposals only apply to unsecured credit where no collateral has been offered.
Enter the amount to show how much you can save with a consumer proposal.
In a consumer proposal the new reduced debt is payable over a 3 to 5 year period, with no additional interest or fees charged.
Consumer proposals are superior to other forms of debt relief, because:
In a consumer proposal you avoid bankruptcy, reduce the amount of your debt and keep all your belongings.
The benefits of a consumer proposal include:
The disadvantages of a consumer proposal are:
Secured debts are excluded unless you are returning the asset back to the lender e.g. returning the car to the dealership.
Although there is a downside to filing a consumer proposal, the benefits and advantages of a consumer proposal far outweigh the negative.
All unsecured debts and credit cards that are not secured, can be applied to a consumer proposal.
Consumer proposals are an alternative to bankruptcy.
In bankruptcy, usually the bankrupt has to surrender any property of value, where no property is taken in a consumer proposal.
As well in bankruptcy should your income increase you could be required to make additional payments, verses a set payment in a proposal.
The consumer proposal is a “debt settlement”, negotiated between the creditor and debtor, payable over a maximum of 5 years.
Debt relief services usually prefer a consumer proposal because:
Payments and the total amount paid are less in a consumer proposal than the full amount of the debt owing at the end of the term.
The creditors are encouraged to accept the deal—because if they do not, the next alternative may be personal bankruptcy.
In bankruptcy most creditors would receive little or nothing in bankruptcy proceedings.
Where you do not have any assets or have a limited income, then filing personal bankruptcy might be worth considering. The insolvency trustee can explain suggest the best option for you.
Consolidation and debt-repayment plans consolidate your debt into one payment over 3 to 5 years, but:
Consolidation loans offered by debt settlement companies, can still leave you in debt for years.
When you enter into a consumer proposal:
Consumer proposals can reduce and pay off your debt over 3-5 years with payments and terms that are affordable to you.
For example, a debt of $20,000 could be reduced to $6,000, payable over 5 years without any interest at $100/month.
★★★★★ My husband was laid off, but our bills kept coming, we were drowning in debt. The consumer proposal solved our money problems and saved us $18,000. We will be debt free in four years, Thank you Susan N. Oshawa
Consumer proposals help you get out of debt in 3-5 years.
Once a consumer proposal is filed, you make monthly payments to the proposal administrator. All other payments stop.
Payments in consumer proposals are based upon:
The trustee, as the proposal administrator works with you to decide what you can reasonably afford to payback on your loans.
Once your consumer proposal is accepted,
In a consumer proposal payments are based upon what you can reasonably afford to pay over a 3 to 5 year period.
After the consumer proposal is filed with the court you:
The proposal administrator (trustee) notifies the creditors of the consumer proposal.
The administrator gives the creditors a report of the financial abilities of the applicant to pay a reduced amount on the debt(s).
Once the proposal is filed you stop making payments on your bills. You make one monthly payment to the proposal administrator.
The administrator then pays the creditors from the monies you gave them.
Consumer proposals are an alternative to bankruptcy.
In bankruptcy the borrower may lose property, where no property is taken in a consumer proposal.
The consumer proposal is a settlement, negotiated between you and your creditors, payable over a maximum of 5 years.
Debt relief services usually prefer a consumer proposal because:
Payments are less in a consumer proposal than the full amount of the debt owing, at the end of the term.
The creditors are encouraged to accept the deal—because if they do not, the next alternative may be personal bankruptcy.
In bankruptcy most creditors would receive little or nothing in bankruptcy proceedings.
Consolidation and debt-repayment plans consolidate your debt into one payment over 3 to 5 years, but:
Consolidation loans offered by debt settlement companies, can still leave you in debt for years.
When you enter into a consumer proposal:
Consumer proposals can reduce and pay off your debt over 3-5 years with payments and terms that are affordable to you.
For example, a debt of $20,000 could be reduced to $6,000, payable over 5 years without any interest at $100/month.
In a proposal you are covered by consumer protection.
Consumer protection means, creditors (credit card companies and people owed money) must stop collection actions against you, including harassing calls, garnishments and lawsuits.
Creditors are prohibited by law from contacting you and must deal with the proposal administrator.
Consumer Proposals are worth doing for three main reasons:
You’re not alone, many people ask themselves “is the process worth it”, but the answer is yes.
Where you’re having issues with debt, a proposal is one of the best things you can do to help yourself.
You won’t be alone, at Yanch Dey we’ll be doing all the paperwork, explaining the process and helping you along the way. It’s a process that we will go through together.
In a consumer proposal you’ll be out of debt in 3-5 years.
Once a consumer proposal is filed, you are covered by consumer protection. Consumer protection means, where you are in a proposal, creditors (including credit card companies and people owed money) must stop all collection actions against you.
Includes harassing calls, garnishments and lawsuits.
Many people with debt issues have credit card debt.
The credit that the credit card companies give is not secured against any asset or property. Credit card debt is considered unsecured credit.
In a consumer proposal, the proposal administrator contacts the card companies and explains that you are unable to pay the amount owed, and will be entering into a consumer proposal.
The administrator then negotiates on your behalf to come to a compromise on the amount that will be paid back.
The credit card companies know that should the debtor file for bankruptcy, unsecured creditors receive little or nothing on what’s owed. Subsequently they usually accept consumer proposals reducing the amount owed, and stopping any further interest or fees being added.
Read more about credit cards and debt solutions >
Many times student loan debt can be reduced in a consumer proposal.
According to The Bankruptcy and Insolvency Act, student loans are abolished if you were a full-time student seven years prior to bankruptcy or a consumer proposal.
The seven year rule is important because if this is miscalculated the student loans cannot be included.
In Canada a garnishment usually means a wage garnishment. In a wage garnishment creditors take a portion of the debtor’s wages at the source, including bank accounts.
Garnishments are:
Where a creditor obtains a court order for a garnishment, the order is served on the employer or bank. The employer or bank is required by law to send the garnished wages to the creditor until the debt is paid.
You cannot stop a wage garnishment yourself. The only way to stop a garnishment is through a licensed insolvency trustee by filing a consumer proposal or by filing for bankruptcy.
Where taxes are owing to the government, the Canada Revenue Agency (CRA) has the authority to:
The CRA can even register a lien against your home for taxes owed.
Unlike other creditors, the CRA usually does not need a court order to seize your property or money.
When a consumer proposal is filed and the CRA are notified:
Credit card debt, student loans and tax debts can be included in a consumer proposal, and wage garnishments are stopped.
★★★★★ The interest and payments on our credit card just kept on going up, then the collection calls started, I knew I had to do something. My friend told my about YanchDey, I called and spoke to Kelly who explained how she could help with a proposal. Best call I ever made! We saved over 30,000, we now pay $250/month and will be debt free in 5 years! Thank you Andrea R. Oshawa
In a consumer proposal you’ll be out of debt in 3-5 years.
Once a consumer proposal is filed, you are covered by consumer protection. Consumer protection means, creditors (including credit card companies and people owed money) must stop all collection actions against you.
Includes harassing calls, garnishments and lawsuits.
The debtor (person who owes money) pays no fee, up-front or otherwise to file a consumer proposal.
When you file a consumer proposal, you and the administrator work out what you can reasonably afford to pay on your debt.
The insolvency trustee then takes that amount to your creditors and negotiates a settlement.
The cost of the consumer proposal comes out of the money going to the creditors.
There is no other fee or cost to you.
You qualify for a consumer proposal where:
Persons who are permanent residents or living in Canada under a work permit or similar may apply for a consumer proposal.
After a consumer proposal has been filed and accepted, creditors must follow the rules set by the government, such as:
The payments you were making to creditors stop. Instead of making individual payments, one monthly payment is made to the Trustee.
The trustee acts as your representative, distributes the money and deals with creditors in all matters, not you.
People contemplating insolvency may already have a poor credit rating and debt problems.
Where a person declares bankruptcy or submits a consumer proposal they are assigned the lowest possible credit score.
TransUnion removes a consumer proposal from your credit report either:
Your ability to obtain and use credit after a consumer proposal depends on convincing lenders of your personal financial maturity and ability to repay the debt; there are no guarantees—no one is required to give you credit.
Once you have fulfilled the terms of your consumer proposal, you will receive a “certificate of full performance” to present credit-reporting agencies.
Many of our clients tell us that the hardest part of the consumer proposal was making that first call and talking about their debts.
★★★★★ We spoke to a consumer credit counseling agency that recommended YanchDey. Making payments on our personal loans plus my unpaid student-loan debt left us with little at the end of the month. The proposal was the best debt management program for us, paying off our debts in 5 years. We’re even saving money now to make a lump sum payment! Thank you NameWithheld, Oshawa.
Making that first phone call is the first and hardest part of the process.
The first step to debt relief and filing a consumer proposal is to speak with us.
Consumer proposals are filed through an Insolvency Trustee, who are licensed to work as a “Proposal Administrator” by the federal government.
Every year thousands of people have financial issues, it happens, but let’s get together and fix this issue.
There is no cost or obligation to speak to a trustee and you can start today by calling us at 905-721-7506.
Your first meeting with the trustee is a discussion about your debts and unsecured credit including:
Many times our clients find it easier to bring in the documents or bank statements for each debt so we have accurate amounts.
During this discussion the trustee will be looking to create a repayment and financial plan based upon:
The trustee takes the information about your debts. This information will include:
The trustee completes all of the paperwork and submits the proposal on your behalf.
Once the proposal is completed the trustee files it with the office of the Superintendent of Bankruptcy.
After the application is accepted a stay of proceedings is issued.
A stay of proceedings means that any creditors must:
After the proposal is filed the trustee sends notice to the creditors.
The creditors may ask for a meeting to discuss the terms of your proposals and ask any questions.
This does not always happen but if it does the trustee will hold the meeting and guide you through the process.
The creditors have 45 days to decide whether they will accept the proposal or ask for a creditors meeting. If no meeting is requested after 45 days the proposal is deemed to be accepted.
Should any creditors contact you, they should be directed to speak to the trustee.
Where a meeting has been requested the creditors have an opportunity to:
The trustee will chair the meeting, report to the creditors on your affairs and explain why the trustee feels the proposal deserves their support.
Where the creditors vote no, your options are to:
In a renegotiation the creditors may ask for higher payments or reduce the term of the payments, e.g from 5 years to 4 years.
Where a meeting is not requested the proposal is deemed to be accepted after 45 days.
Where the proposal is accepted you start making the monthly payments on the proposal.
You are required to attend two credit counselling meetings with the trustee and an online program. The counselling is to help you going forward dealing with credit.
After the proposal has been completed you receive a certificate of completion.
The certificate of completion shows that the terms of the proposal have been completed and that the debt(s) have been cleared.
After completing the consumer proposal, Equifax credit reporting agency removes the consumer proposal from your credit report 3 years after you’ve completed all of the consumer proposal payments.
TransUnion removes a proposal from your credit report either:
While in the proposal you can obtain a secured credit card. We suggest that you look for a credit card with a maximum credit limit of $500.
The credit card has to be paid off each month completely. The proposal will affect your credit score, but where you’re paying off the balance each month the credit rating will improve.
We also suggest that clients use this time to try to build up savings, as they do not have the high loan payments they were making previously.
Consumer Proposal Ontario
I was buried in credit card debt and didn’t want to ask for help.
My friend pushed me to see someone, that’s when I picked up the phone and called. After months of stress and anxiety – one meeting with them felt like a warm hug.
Before I knew it, I was signing consumer proposal documents with Kelly. I now am paying my bills with a plan to be out of debt in 3 years.
I am so lucky I came to YanchDey, the process that I thought would be like nails on a chalkboard was like a weight lifted off my shoulders. I admit there were some bumps in the road, but I feel like a new person – one who can pay their bills.
When I started college, in the first couple of days there were people at the school getting you to sign up for a credit card.
I applied for a student Visa, everyone was doing it and it seemed like a very reasonable thing to do.
I planned to use it to pay for my books and travel expenses while I was in school. I had a part time job and my parents were paying for my tuition so it wasn’t a problem.
However, once I graduated I could not find work in my field and started applying for more credit to help me get by.
Once I was working I kept using the credit cards, plus a line of credit to pay for unexpected expense like car repairs or I would use them at Christmas time or occasionally to take a vacation.
I was never really given advice on how to budget or deal with finances. Before long I realized that the debt was so high I was never going to get out of it.
Even if I paid the most I could afford every month it would still take me years to pay everything off.
Pauline Vorvis
3 days ago
★★★★★ We had 23,000 in credit card debt that I was never going to pay off. My new loan is now $7,000 and pay $195 over three years. Thank you so much.
Randy Singh
7 days ago
★★★★★ My husband’s paycheque was garnisheed, we owed 36,000. The consumer proposal, stopped the garnishment, and reduced our debt to 10,000. So thankful we called.
Debbie Theriault
2 weeks ago
★★★★★ I needed to get out of debt. I still had student-loans after 10 years and was sick of borrowing money. I thought I’d have to file for bankruptcy, but they explained how they could get me out of debt and save thousands. My life has changed, I can sleep and have control of my finances. With the consumer proposal I’m debt free, I even appreciated the debt counselling. No consumer credit and struggling with debt for me. God bless!
Christien Egistone
4 weeks ago
★★★★★ Thank you, I will have me out of debt in 3 years and save 15k, I’ll never have credit card debt like that again, I appreciate your help and will refer and recommend you to friends.
Danny Demers
1 month ago
★★★★★ I was very pleased the way they handled my creditors. I ended up paying a fraction of what I owed on my debt.
I was 30 years old with a great job but never had the skills to properly manage money.
I was in debt to banks, credit cards and most importantly to my friends and family. Constantly chasing the bills from pay cheque to pay cheque and embarrassed at work with collectors constantly calling. I didn’t want my co-workers to know, but in all honesty they all knew I had debt issues.
The debt was an embarrassment and source of shame, every day I was afraid to answer the phone because I knew it was a collector.
I was looking at losing everything, my house, my friends, my job.
I swallowed my pride (if you want to call it that), called YanchDey, which was the beginning of a new life for me.
At first, I was nervous and ashamed, but the staff at YanchDey were patient, caring, knowledgeable and understanding. There was no judging or shaming.
I ended up filing a consumer proposal. I was guided every step of the way by Kelly and Lorraine. I was able to pay off all my debts and even my taxes were brought up to date.
I have begun a new life, with no more looking over my shoulder. If this sounds like you, I highly recommend using YanchDey. Turned my life around. Thank you Kelly and Lorraine.
I was buried in credit card debt and didn’t want to ask for help.
My friend pushed me to see someone, that’s when I picked up the phone and called YanchDey. After months of stress and anxiety – one meeting with them felt like a warm hug.
Before I knew it, I was signing consumer proposal documents with Kelly and paying my bills and had a plan to get out of debt in 3 years.
I am so lucky I came to YanchDey, the process that I thought would be like nails on a chalkboard was like a weight lifted off my shoulders. I admit there were some bumps in the road, but I feel like a new person – one who can pay their bills.
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