What Are Consumer Proposals?: Who Uses This Service?

What Are Consumer Proposals?. Consumer proposals are a unique service that is overseen by the Office of the Superintendent of Bankruptcy (OSB).

Raju Choudhary

Consumer Proposals

Finances can be hard in the modern era. It isn’t just that everything is more expensive, though that is a contributing factor. It is also the pervasive nature of our advertising and consumer businesses that confuses and tempts us on a daily basis. More and more, we have options that may not apply to our wants or needs but still end up becoming a purchase.

Of course, in the short term, this isn’t an issue. However, once multiple credit cards, mortgages or private loans get involved, the story becomes very different. When you are struggling with a heavy financial burden and don’t know where to turn, it is important to pursue the right options to get back on your feet.

One of those options we will look at in more detail today. Consumer proposals are a unique service that is overseen by the Office of the Superintendent of Bankruptcy (OSB). They are a way for people with debt to present an offer to their debtors.

Who Uses This Service?

People who are struggling with debt might find relief from a consumer proposal. Several actions are triggered after the initial proposal, including:


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  • Debtors are no longer allowed to contact you
  • Your debts no longer accrue interest

There are other advantages as well, but we will get into more detail about them later. First, it is important to ask, “Who administers consumer debt proposals?”

Who Administers Consumer Debt Proposals?

The only people who are legally entitled to offer consumer debt proposals are Licensed Insolvency Trustees (LIT). These professionals are designated by the OSB to perform these federally-regulated debt solutions, as well as providing helpful advice and additional information.

What Else Can LITs Do?

Although consumer proposals are one of the most beneficial services available from a LIT, they are also capable of performing bankruptcy filing and debt consolidation activities. However, what truly separates a LIT from an accountant or other person giving advice is their federal regulation. This means they must uphold the Code of Ethics for Trustees.

More Advantages of Consumer Proposals

Although getting your debtors off your back and stopping interest accrual are fantastic advantages for those struggling to control their debt, they are only the tip of the iceberg for services available from capable and helpful LITs. Another fantastic part of the service is stopping wage garnishments.

These fees are a result of overdue payments to large lenders or governmental debts, like taxes or child support. They are taken directly from your income and can be a serious impediment to your expected quality of life. When you choose a consumer proposal, however, your wages will cease to be garnished.

Another substantial benefit is the reduction in your total amount owing. When you have thousands of dollars in debt, it can be a struggle just to keep your head out of water. Therefore, reducing that amount to a reasonable sum can make all the difference.

What Else You Need to Know

Although there are several advantages to consumer proposals, it is still important to know all the details. One of the major points worth noting is that over half of your debtors have to agree to your proposal for it to be legally binding. The positive side of this is that once that happens, all debtors are now legally bound to your proposal.

However, the other side of this is that you must meet the halfway limit to qualify your consumer proposal. It is best to work with your chosen LIT to see if this is the right option for you.

Raju Choudhary

Article by Raju Choudhary Raju has written 810 articles. If you like This post, you can follow CAknowledge on Twitter. Subscribe to CAknowledge feed via RSS or EMAIL to receive instant updates.


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