Is A Proposal
Right For Me?
Comparing a consumer proposal to other debt plans.
There are some pretty significant differences between a consumer proposal, offered by a Licensed Insolvency Trustee, and a debt management plan, which is offered by a credit counsellor or “debt consultant.” The most important thing to note is that a consumer proposal is a legal agreement approved by and offering the protection of the courts, while a debt management plan is completely voluntary—your creditors are not obligated to participate and there is no protection against any legal action brought against you.
Collections calls, wage garnishments and threats of legal action stop when a consumer proposal is filed
A creditor can continue to garnish wages and pursue legal action if they choose not to participate in the plan
All debts included in the proposal are frozen and will not earn any additional interest
It is up to each creditor to decide whether they want to freeze interest charges
Filed by a Licensed Insolvency Trustee and approved by the courts
Voluntary agreement that does not receive court approval
Usually pay only a portion of total amount owed
Usually pay total amount owed
Single monthly payment based on your financial situation
Single monthly payment
No additional fees beyond your monthly payment
Additional fees are common and vary widely
As long as most of the creditors vote to approve your consumer proposal, all creditors must abide by it
Any creditor can decide not to participate in a debt management plan; you would have to pay full interest on the debt owed to them
Maximum repayment period of five years
Maximum repayment period of four to five years
Must attend credit counselling
Credit counselling is optional
Remains on credit report for three years after proposal is completed
Remains on credit report for three years after debts are paid