a worried couple sitting at the counter considering a consumer proposal to pay off their debts in Ottawa

How Do You Qualify for a Consumer Proposal?

Are you struggling to pay the bills on your debt? Filing a consumer proposal might be the best way to improve your finances, avoid bankruptcy and protect your assets. Here’s what you need to know.

A consumer proposal is a formal, legally binding process administered by a licensed insolvency trustee (LIT). The LIT works with you to develop an offer to pay back your creditors a percentage of what is owed to them, extend the time you must pay off the debts, or both. Keep in mind that the term of a consumer proposal is generally five years.


How To Qualify for A Consumer Proposal

In addition to being insolvent – that is, unable to pay your debts – you must meet the following requirements to file a consumer proposal:

  • You must be an individual. Businesses cannot file consumer proposals.
  • You must be at least 18 years old.
  • You must have a stable source of income.
  • You must owe at least $1,000 but no more than $250,000, excluding the mortgage on your principal residence.
  • You must not have any prior proposal proceedings still open. If you previously filed a consumer proposal that was annulled, you can’t file another until all the claims filed in your prior proposal have been paid in full or excused by bankruptcy.

When you file a consumer proposal, you must attend two counselling sessions led by a licensed insolvency trustee to help you to manage your future financial affairs.


Joint Proposal

You may qualify for joint filing if you want to file a proposal with your significant other due to shared debts or a co-signed loan. More than one person can file a consumer proposal if they meet the following requirements:

  • Both individuals involved have mostly or exactly the same debts to pay off 
  • The shared debt doesn’t exceed $500,000, excluding the mortgage on their principal residence

If two parties agree to split the payments and one person stops paying, the other person must make up the difference, or the proposal will be annulled.


Consumer Proposal Help in Ottawa and Virtually Across Canada

At D. & A. MacLeod Company Ltd., our team of compassionate licensed insolvency trustees has been helping individuals get out of debt since 1952. In addition to in-person consultations, we now offer virtual consumer proposal appointments for individuals across Canada. Contact us today to learn more about our services. We’re committed to helping you find a new beginning™.