Ontario Consumer Proposal

Few things in life are as sure as inflation. Even economies in the midst of slow growth or a recession typically see a rise in consumer prices each year. This is true for Canada, including Ontario. The only real question about consumer prices in Ontario and elsewhere is the rate at which these prices will rise.

As of March 2013, the rate of consumer price inflation was low by historical standards, as prices grew at an average of only 1.2 percent from the same period in 2012. Overall, that is good news, as it increases the likelihood that incomes will keep up with inflation.

However, even a modest increase in prices can spell trouble for those who are already having difficulty paying their bills on time. With the average Canadian household debt reaching approximately $27,500 in 2012, there is cause for concern, especially since a rise in consumer prices means that many debtors will be adding more to their debt in 2013 than they did in 2012.

If you live in Ontario and are having trouble paying your consumer debt, there is help for you. This includes debt solutions such as the Canadian consumer proposal. Ontario residents who want to get out from under their debt should definitely consider this method of debt repayment.

An Overview of the Ontario Consumer Proposal

The consumer proposal is a debt solution that provides all of the essential protections of a bankruptcy without the associated fees and time in bankruptcy court. In a consumer proposal, residents work with a licensed bankruptcy trustee to formulate a legal proposal to lower interest rates and settle debts for less than what is actually owed. Once a consumer proposal in Ontario has been put together, it is sent to one’s creditors for approval. The proposal is binding on all creditors if creditors holding a simple majority of your debt — 51 percent — agree to its terms.

A consumer proposal is for those who have a high level of debt and an insufficient amount of assets to have a reasonable chance of paying it off. If you owe up to $250,000 in consumer debt, you will likely qualify for a consumer proposal, although other options will probably be better if you owe less than $10,000. Married couples can have up to $500,000 in debt when filing jointly.

What Are the Advantages and Disadvantages of an Ontario Consumer Proposal?

In addition to giving residents with a high level of consumer debt an easier way to pay off debt, there are other advantages of the consumer proposal. Ontario consumers also benefit from:

Convenience— A consumer proposal consolidates debt and you pay it off through the bankruptcy trustee in one lump-sum payment or in a monthly payment plan.
Asset Protection— A consumer proposal protects your assets from seizure and stops the calls from bill collectors.

However, there are also disadvantages to a consumer proposal in Ontario:

Future Credit— Though it is not a bankruptcy, a consumer proposal impacts your credit like bankruptcy. In other words, it will be hard for you to get new credit for a period of seven years after filing a consumer proposal.
Changing Terms— If you miss 3 payments, your proposal will automatically be annulled. This won’t happen as often in another debt solution such as debt settlement.

Find Out More

To find which debt relief solution is most appropriate for your situation, fill out the online debt relief form and receive an accurate estimate of your savings with the various debt relief options.


get your free savings Estimate