File a Consumer Proposal
Through a Bankruptcy Trustee (now called Licensed Insolvency Trustees)
Most people know about bankruptcy, but not as many know about a consumer proposal. It’s a legal agreement between you and your creditors arranged and administered by a bankruptcy trustee, to repay your debt with monthly payments that can stretch to almost 5 years. Instead of consolidating your debts into one loan, it consolidates your debt payments. Your debts will still be with your creditors, but the amount you pay your trustee each month is disbursed to your creditors after their fee is deducted.
Like bankruptcy, filing a consumer proposal is a big decision that will affect your credit for years to come and can even impact future career opportunities. Similar to bankruptcy, the amount of debt you have to repay is often reduced if your creditors agree to the proposal your trustee puts forward. This often results in lower monthly payments.
- No interest
- Often repay less than you owe
- Pauses active debt collection on student loans
- Not private – consumer proposals are a permanent public record
- Typically does a lot of damage to your credit rating for about 8 years
- Missing more than 3 payments ends your proposal and you can’t file another one