How Does an Ontario Consumer Proposal Provide Debt Relief?

Adamson & Associates, Inc.
5 min readAug 4, 2019

Ontario consumer proposals are designed to help people get their finances back in order so they can carry on with their lives. The debt relief they provide helps people focus on what really matters to them, whether it’s kids, travel, or just snuggling up with the cat and reading a good book at night.

Here’s what you can expect if you are interested in filing one of these proposals in Ontario.

You’ll Work With Your Creditors, Not Against Them

If you don’t have much cash and your income doesn’t cover your bills, your creditors would much rather you pay a reduced balance than not pay them at all. Wouldn’t you love it if you could stop fighting with bill collectors?

One way to settle your debts with them is to have a Licensed Insolvency Trustee (LIT) help you. They’ll work out a proposal that works for everyone — but especially for you. It’s easy to determine your options because they provide free consultations with no obligations.


There are Other Benefits, Too

Lots of people across Canada opt for this kind of solution as a way to avoid bankruptcy. They find it a more suitable choice to make because it’s simpler and it does less harm to their credit score (and they don’t have to forfeit their tax refund!).

How do Consumer Proposals Work in Ontario?

Nobody goes it alone. Your first step is to contact a Licensed Insolvency Trustee (LIT).

Why a Licensed Insolvency Trustee?

They are the only ones who can legally file this type of proposal for you in Ontario. Others can only make referrals. And if they’re commission-based, their solutions may not be in your best interest.


Here’s what you can expect to happen once you contact a trustee:

  1. The free Assessment. The LIT will give you a FREE debt assessment.
  2. A Personalized Payment Plan. Next, they’ll set up a personalized payment plan that’s based on what you can afford. Using their knowledge and experience, they’ll also work to devise a plan that is likely to be accepted by your creditors.
  3. An Affordable Plan. They’ll go over the plan with you, making sure it’s a good fit for you.
  4. Your Approval. If you approve the plan, they’ll prepare and file all the paperwork that’s required when you submit this type of legal document. All you do is sign the forms.
  5. Filing With the Government. Then they’ll file the paperwork with the proper government agency to make the document legally binding.
  6. Talking to Creditors. Finally, they’ll speak to your creditors on your behalf so you don’t have to.

But you’re not done yet, and neither is the role that your Licensed Insolvency Trustee plays in helping you solve your debt problems. The proposal isn’t a legally binding agreement until your creditors agree to it, too.


What Happens After the Proposal is Filed?

  1. Voting. Once the proposal is filed with the government and your creditors have had a chance to review it, they take a vote.
  2. How votes are counted. Each creditor has a certain number of votes based on the dollar amount that is owed to them. So, let’s say you owe more money on your Visa card than you do on your Sears card. The collectors at Visa will have more votes on whether to accept your proposal.
  3. Creditors accept or reject. If your proposal is accepted, you will start your payments. You will also sign up for credit counselling. If your proposal is rejected, your LIT will negotiate with each of your creditors on your behalf.
  4. Start building your future again. You’re now on your way to a healthier financial future.

Wondering what a solid financial future looks like? From easing the stress in your life to building a solid future for your family, here’s a sampling of what’s to come after you partner with a trustee and begin building back your life.

Here’s What Your Future Holds: The Benefits of Filing a Consumer Proposal in Ontario

There are all kinds of reasons you’ll benefit when you take care of your debts in a responsible way. Here are just a few of them.

1. You’ll be more financially secure.

The debt that you carry is a serious threat to your financial stability. Even when you’re trying to make the most of your money, those monthly interest payments are always there, ready to sabotage any budget you try and make.

2. You’ll have more money to spend on the things that really matter.

Debt that just never goes away keeps you from being able to do the things you want with your money. The money you put toward your debt every month could actually be saved for something else like your kids’ education.

3. You’ll be able to show your kids what good money habits look like.

No parent wants their kids to fall into the same traps they did. So if you’re struggling with debt right now, it’s hard to help them avoid debt. If you want them to grow up and stay away from debt, don’t just tell them about it — lead by example.

4. You’ll improve your credit score so you can buy a home.

When you have too much debt, your credit score can really take a hit. Credit card balances are especially bad for your rating and everyone knows you need good credit to buy a home. Another thing that lowers your score is when the amount owed is high compared to the amount you originally borrowed. That’s what can happen if you carry a balance too long. Interest and fees can start to actually make the balance creep upwards.

That’s terrible news for anyone who’d like to buy a home someday. You’ll need a reasonable score to get a mortgage. Scores can be improved but not while you’re carrying a bunch of debt.

5. You’ll have less stress in your life.

Nobody needs any extra stress in their lives, but that’s exactly what debt can bring. The constant pressure of worrying about how you’ll pay down that debt while you cover all your other living expenses can wreck your health, too. Serious health issues like migraines (and worse) have been associated with stress so getting rid of debt can make you healthier, too.

Ready to Clear Your Debts?

No matter what form of debt relief you end up choosing, a chat with a Licensed Insolvency Trustee can help you make an informed decision to get out of debt faster. And the faster you become debt-free, the quicker you can begin living the life you want.


Originally published on on May 11, 2019.



Adamson & Associates, Inc.

Licensed Insolvency Trustee. Experts in bankruptcy, consumer proposals, credit counselling, and other debt solutions in Ontario.