Who qualifies
- You must be insolvent, meaning you cannot pay your debts as they come due.
- Your total unsecured debts must be below the consumer proposal limit (currently $250,000, excluding a mortgage on your home).
- You must be able to make monthly payments from income.
- You do not need to be employed, but a stable income helps the proposal succeed.
The steps
- Meet a Licensed Insolvency Trustee for a free consultation.
- The trustee assesses your finances and files the proposal with the Office of the Superintendent of Bankruptcy.
- Creditors vote on the proposal; it is accepted if a majority of dollar-value creditors approve.
- You make monthly payments (and attend two counselling sessions) for up to 60 months.
- Once complete, the remaining unsecured debt is discharged.
Cost and effect on credit
- Trustee fees are set by statute and come out of the monthly payments, not billed to you separately.
- A proposal stays on your credit report for several years after completion, but rebuilding begins immediately.
- You keep your assets, including a financed car, as long as you keep paying the loan.
Save thousands
Save thousands by refinancing your vehicle anywhere in Canada.
Free to apply, no obligation, and no credit check to pre-qualify.
Frequently asked questions
Often yes if you have income to make payments. It reduces debt with less credit damage than bankruptcy and lets you keep assets.
Usually yes, if you continue paying the car loan. A trustee can confirm for your province and vehicle.
Sometimes. If lowering your car payment frees enough cash to service unsecured debt, refinancing can help you avoid a proposal. Compare with a trustee.