How to File a Consumer Proposal

So you’ve been doing your research on the Internet, and you’ve decided that a consumer proposal might be a way to rid yourself of your debt-stress and get back on your feet financially. Good for you, because sometimes the decision to take action is the hardest one of all to make.

But now what? In this, part three of a ten-part series, we look at the process behind filing a consumer proposal.

Your first step in beginning the process is to seek the help of a consumer proposal administrator, who will also be a licensed trustee in bankruptcy. The trustee will review your financial situation with you in depth to determine whether or not a proposal will work for you — and to see if there are any other options available that might suit you better (such as credit counselling, debt consolidation, bankruptcy, etc.).  If a proposal is your best option, the trustee will prepare the required documents for filing with the Office of the Superintendent of Bankruptcy (OSB), which oversees insolvency proceedings in Canada.

You will have to report all of your assets, liabilities, and income.

  • Assets will include everything you own (property, vehicles, furniture, jewelry, equipment, investments, cash, savings, and so on).
  • Liabilities will include all of the debts that you owe — both unsecured and secured by some kind of collateral, such as your house and/or your car.
  • Income will include all income from any source from all family members in your household.

The trustee will analyze this information to determine what the creditors might receive if you become bankrupt.  Once this amount is established, it will form the basis for determining what settlement you will offer to your creditors and what form your proposal will take: i.e. what your payment amount will be if you will be making monthly payments, or what lump sum you will offer to your creditors. The trustee then sends the completed proposal and related information to the OSB and to each of the creditors involved, who will have 45 days to respond.

Next week: a look at what you can expect after the proposal is filed: what happens during the 45-day creditor response period…and beyond?

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