Is a Consumer Proposal a Good Idea?

Francois Gilbert - Licensed Insolvency Trustee    FRANÇOIS GILBERT – Licensed Insolvency Trustee (LIT)

Is a Consumer Proposal a Good Idea?

Looking for a debt solution you can afford?

At Fontaine & Associates Inc., we understand that every person’s financial circumstances are different. A personalized debt solution makes all the difference. Our knowledgeable credit councillors and Licensed Insolvency Trustees are dedicated to applying their expertise to get you back on track quickly. For over 35 years, we have successfully helped people just like you significantly reduce their debt load, providing peace of mind about their financial future.

Insolvency happens, and there are solutions regulated by the federal government to help honest, but unfortunate Canadians get a fresh start. Are you unable to afford to make your payments in full, but have the ability to pay some of your debts? If so, a consumer proposal may be your best debt solution.


What is a Consumer Proposal?

A consumer proposal is a legally binding debt relief solution that allows you to pay back a percentage of what you owe interest-free while maintaining your assets. This repayment plan gives our clients the opportunity to reduce their debts by upwards of 70%. A proposal can help you save a significant amount of money, by repaying a fraction of what is owed to your creditors. You also receive guaranteed creditor protection and an extended period of time to pay your debts.

 A consumer proposal in Ontario guarantees:

  • Ability to retain your assets (i.e. home, vehicle, investments)
  • Total debt reduction of up to 70%
  • Consolidation of debts into a single affordable monthly payment
  • You pay no interest
  • Wage garnishments, collection calls, and legal actions stop immediately

What does a consumer proposal look like? Let’s consider this example:

Jason has $35,000 in unsecured debt (i.e. credit card debts, bank loans, and taxes). After living costs, he only has $500 left each month and cannot afford to pay $1,050 minimum payments to his creditors. His Licensed Insolvency Trustee might propose that Jason pays a total of $15,000 over the course of five years as part of a consumer proposal. Jason would not be losing money paying interest fees, and he would only have to make one monthly payment of $250. That’s a savings of $800 every month!

What debts are included with a consumer proposal?   Consumer Proposal Debts

  • Credit cards
  • Bank loans
  • Student loans
  • Tax debt
  • Payday loans

A consumer proposal could be your most affordable debt solution if you have up to 250,000 in debt, not including a secured mortgage. At Fontaine & Associates, a consumer proposal is always administered by a Licensed Insolvency Trustee (LIT).

How does a Consumer Proposal work?   How does a consumer proposal work?

Often times the first step is a free consultation meeting. A Fontaine & Associates Licensed Insolvency Trustee (LIT) will meet one-on-one with you to evaluate your financial situation. Based on this information, your LIT will work together with you to come up with an affordable amount to offer your creditors. We assess the total amount of money owed, along with factors such as your income, assets, and family size.

Based on this information, we are able to determine:

  • how much you can afford to pay each month
  • the amount your creditors would get if you declared bankruptcy
  • the amount your creditors might expect as a minimum payout

These parameters ensure that your consumer proposal includes a debt repayment plan that is affordable for you and fair to your creditors. Your Licensed Insolvency Trustee will negotiate with your creditors on your behalf. Negotiations will factor in the amount your creditors expect and what you can afford. Typically, the agreed-upon payments are much lower than any other debt-relief alternatives. The remaining debts are typically 30% of what you originally owed, and must be repaid in equal monthly payments over a period of three to five years.

Your consumer proposal is filed, now what?   Consumer Proposal Creditor Vote

  • Once a consumer proposal is drawn up that you can afford, your proposal is filed with the Office of the Superintendent of Bankruptcy (OSB).
  • All direct payments to your unsecured creditors are stopped.
  • If your creditors have lawsuits filed against you or are garnishing your wages, these actions will also stop.
  • Your Licensed Insolvency Trustee will submit the filed consumer proposal to your creditors along with a report on the cause(s) of your financial difficulties.
  • Your creditors have 45 days to accept or decline the proposal.
  • The outcome is based on a majority vote.

Unlike credit counselling and other debt solution programs, a consumer proposal in Ontario is binding on all creditors once accepted. This applies to lenders who do not participate in informal debt settlement programs, including Revenue Canada. Because of the majority vote, not every single creditor has to agree to the proposal, and it is still binding to everyone. As a result, you are not left with one outstanding debt to worry about – all your debt will be taken care of.

How long does the consumer proposal process take?   Consumer Proposal Duration

In some cases, a meeting of creditors is requested. A creditor must make a request for the meeting within 45 days from the date your consumer proposal was filed. In some cases, an OSB might also instruct the LIT to call a meeting. When this occurs, the meeting must be held within 21 days of the request. In a meeting of creditors, a vote will be held to either accept or reject the proposal. If a meeting of creditors is not requested within 45 days of the proposal’s filing, according to law, the proposal is automatically deemed as accepted by the creditors.

If my proposal is accepted, what are the stipulations?

  • You are able to retain your assets, as long as the agreed-upon payments are made.
  • You are responsible for paying either single monthly payments (or a lump sum)
  • You must attend two financial counselling sessions

Will I qualify?   Consumer Proposal Qualifications

Schedule a free consultation with one of our knowledgeable LITs to determine if a customer proposal is the best option for you.  By law, there are federally regulated requirements that you must be met. In order to be eligible to file a consumer proposal with a Fontaine & Associates LIT in Ontario, a person must:

  • have the ability to pay a portion of their debts
  • not have debts greater than the value of what they own
  • must not have debt exceeding $250,000 (excluding a mortgage, car loan, or investments)
  • be able to make monthly payments, or one lump sum payment

We meet with Ontarians just like you every day that wish to repay as much of their outstanding debt as they can afford while retaining their assets. Most unsecured debts CAN be eliminated by a consumer proposal!

Here’s why consumer proposals are the #1 debt solution in Canada!

Consumer Proposal Free Consultation Meeting

You may be wondering if a consumer proposal is a good idea, or if it is the right solution for you. If you are asking yourself “Is a consumer proposal worth it?”, then here are some important things to consider. A consumer proposal could be your best option if…

  • You want to avoid bankruptcy
  • You have assets you would like to keep
  • You have debts under $250,000
  • Your work requires disclosure of bankruptcy
  • Your income is high enough that you would be required to make large surplus payments in the case of bankruptcy

Whatever stage you are at in the decision-making process, meeting with a Licensed Insolvency Trustee for a free consultation will only make it that much easier. LITs are the only professionals in Canada able to administer consumer proposals. What many people do not know, is that credit councillors and unlicensed debt consultants cannot legally provide consumer proposal services. They can only refer clients to a Trustee that is licensed by the federal government. Consumer proposals can only be filed with a Licensed Insolvency Trustee (LIT) according to Canadian law. With Fontaine & Associates, we will walk with you through every step of the proposal process.

Get started today!

Fontaine & Associates has helped thousands of Ontario residents overcome their debt. We understand that everyone experiences setbacks, and we offer solutions that can eliminate your debt and reduce your stress and worry. You can schedule a free consultation with one of our LITs at any time to evaluate your finances and discuss options for your financial situation. We guarantee:

  • Free consultations with any one of our Licensed insolvency trustees
  • We are dedicated to finding a debt solution you can afford
  • No additional fees or interest charges
  • Our staff will meet with you as often as you need

We provide knowledgeable staff to answer all your debt-relief options, including credit counselling, debt consolidation, debt settlement, consumer proposals, and personal bankruptcy.

Call Fontaine & Associates today 1-877-241-6018 to get all your financial questions answered through one of our knowledgeable Licensed Insolvency Trustees. We are always ready to assist you with your particular set of financial circumstances and create a good outlook for your financial future. Finding our nearest office is as easy as scrolling down.


Francois Gilbert - Licensed Insolvency TrusteeFRANÇOIS GILBERT

Licensed Insolvency Trustee (LIT)


Francois obtained his CPA accounting designation in 1995, his CIRP insolvency designation in 1998 and became a Licensed Insolvency Trustee (LIT) in 1999. He has been working in the field of insolvency since graduating from the University of Ottawa in 1991 and has been with Fontaine & Associates since 2002. Prior to that, Francois was working in the Ottawa office of PwC.

Francois has been helping individuals solve their debt problems now for over 20 years by providing advice on credit counselling, consumer proposals and personal bankruptcies. He also has extensive experience in business restructuring.

When he is not at work, Francois spends most of his time with his wife and kids doing outdoor activities and he also volunteers with local non-for-profit organizations in the Ottawa area from time to time. He is an avid musician and plays the keyboard, mainly for his own enjoyment.

Your way to financial relief starts here!

We’re here to answer your questions and get you back on track. Schedule your free consultation now!


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