consumer proposal, debt-relief, eliminate debt

Consumer Proposal Toronto: The Ultimate Guide

Struggling with debt in Toronto? Learn all about Consumer Proposals, a debt relief option that can help you get back on track. Read on for more information.


Consumer Proposal – Introduction:

Dealing with debt can be overwhelming and stressful. If you’re in Toronto and struggling to keep up with your bills, you may be searching for a solution. One option that you may have heard of is a Consumer Proposal. This type of debt relief can be an effective way to get back on track financially and regain control of your life. In this article, we’ll take a closer look at Consumer Proposals in Toronto, what they are, how they work, and whether they might be the right choice for you.

What is a Consumer Proposal in Toronto?

A Consumer Proposal Toronto is a legal agreement between you and your creditors to repay a portion of your debt over a specified period of time. This type of debt relief is only offered through a Licensed Insolvency Trustee (LIT) and is a formal alternative to declaring bankruptcy. Unlike bankruptcy, Consumer Proposals do not require you to surrender valuable assets and do not have the same impact on your credit score.

How does a Consumer Proposal work in Toronto?

A Consumer Proposal in Toronto works by offering your creditors a reduced payment plan that is manageable for you. Your LIT will negotiate with your creditors on your behalf to reach an agreement that works for both parties. It is commonplace that as much as 70% or more of the debt-load will be written-off.  Once the Consumer Proposal is approved, you will make monthly, interest-free payments to the LIT, who will then distribute the funds to your creditors. The length of the Consumer Proposal can range from a single payment to payments spread over five years, depending on your individual circumstances and the agreement reached with your creditors.

Who can file a Consumer Proposal in Toronto?

Anyone who is struggling with debt and is a resident of Toronto can file a Consumer Proposal. There are a few eligibility requirements, including:

  • You must owe less than $250,000 (excluding your mortgage)
  • You must have a steady income, or know of a willing person that has funds,  to make proposal payments.
  • You cannot file a consumer proposal in Toronto –or anywhere in Canada—if you have filed consumer proposal previously that was cancelled (annulled).

What are the benefits of a Consumer Proposal in Toronto?

A Consumer Proposal in Toronto can offer a number of benefits, including:

  • In substantially all cases, it can reduce your debt by 70, 80 or even 90%
  • It can provide a manageable payment plan that fits your budget
  • It can stop wage garnishments and collection calls
  • It can protect your assets from being seized by creditors
  • It can provide a fresh start and allow you to regain control of your finances

What are the disadvantages of a Consumer Proposal in Toronto?

While a Consumer Proposal in Toronto can offer many benefits, it is important to consider the disadvantages as well. These can include:

  • It will have a negative impact on your credit score
  • It may not be an option for those with a high level of debt (over $250,000 excluding the balance owing on a mortgage on your principal residence
  • It may take several years to complete the Consumer Proposal


  1. Can I file a Consumer Proposal on my own?

No, you must work with a Licensed Insolvency Trustee to file a Consumer Proposal in Toronto. Your LIT will guide you through the process and ensure that your Consumer Proposal meets all the necessary legal requirements.

  1. Will my creditors agree to a Consumer Proposal?

Your LIT will negotiate with your creditors on your behalf to reach an agreement that works for both parties. In most cases, creditors will agree to a Consumer Proposal because it provides them with a better return on their debt than in a bankruptcy.

  • What is the impact on my credit report?

A consumer proposal will be reported by the credit bureaus as an R7 (R1 is perfect credit, R9 is bankruptcy) and will remain on the credit bureaus for three years after the completion of the Consumer Proposal.

  • Do I have to attend court when filing a Consumer Proposal in Toronto?

There is no requirement to attend court when filing a Consumer Proposal in Toronto. Only in very rare circumstances will there be a requirement to have a court hearing to approve a proposal.  In over 30 years, we have only had once instance where a court attendance was required.

For more information on consumer proposals, make sure to check out What is a Consumer Proposal.

Or you can take this simple and quick assessment to see if you might qualify to write off your debts through this program.

About Author

Dr. Jacques Rusinek LIT

Dr. Jacques Rusinek LIT

Dr Jacques (Jojo) Rusinek LIT was licensed in 1999 as a trustee in bankruptcy (now called Licensed Insolvency Trustee). He has helped thousands of people to become debt-free.

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