Consumer Proposal in Hamilton, Ontario

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Selecting the Right Debt Solutions Professional in Hamilton, Ontario

Managing debt is a significant challenge for many Canadians, often stemming from job loss, unexpected emergencies, or economic downturns. This financial burden can exert significant pressure on your life, creating what feels like a descent into an inescapable downward spiral. When evaluating options like debt consolidation, which requires the repayment of the entire debt, and bankruptcy, which poses a risk to many assets you may have, a Hamilton consumer proposal is an attractive alternative for addressing financial struggles.



What is a Consumer Proposal?

The Consumer Proposal is a federally regulated, legally binding process overseen by the Office of the Superintendent of Bankruptcy. It is an attractive alternative to declaring personal bankruptcy. Only a Licensed Insolvency Trustee (LIT) is allowed to file a consumer proposal, just like bankruptcy. One of the most significant benefits of a consumer proposal is that you can reduce the debt you must repay by up to 80%.

With a consumer proposal, you book a consultation with a Licensed Insolvency Trustee (LIT), who will carefully review your financial situation to determine if a consumer proposal is the best solution for you. If this is the case, they will prepare the consumer proposal, outlining the amount of debt that will be repaid and the repayment details, such as monthly payment and for how many months the proposal will be.

The consumer proposal will be filed and sent to your creditors for approval. From this moment on, all legal action, such as collection calls or wage garnishments against you, will cease. If your creditors agree, the proposal will come into effect immediately. You will make your monthly payment to your LIT, who will then distribute it among your creditors. Once all payments have been made, the remaining debt will be discharged.

The most significant benefit of debt management is that you can discharge up to 80% of your unsecured debt.

What Debts are Covered in a Consumer Proposal?

A consumer proposal includes most unsecured debts, which means that any debt secured by an asset, such as a mortgage or car loan, cannot be included in a consumer proposal in Hamilton. Typically, the following can be included in a consumer proposal:

  • Credit card debt
  • Personal loans, including lines of credit, consolidation, or renovation loans, provided no assets secure the debt.
  • Payday loans
  • Student loans, if you stopped to be a student at least seven years ago
  • Income tax debt, encompassing amounts owed for personal income tax (including penalties and interest), GST debts, Canada Child Benefits overpayments, CPP, and OAS overpayments.


Is a Consumer Proposal Right for Me?

  • A consumer proposal might be a suitable option if:
  • Your debt is less than $250,000, excluding your principal residence’s mortgage.
  • You are insolvent, meaning you cannot meet your monthly obligations.
  • You seek relief from wage garnishments, collection calls, and accruing interest.
  • You aim to retain assets that may not be safeguarded in bankruptcy.

Alternatives to Consumer Proposal

There are other debt relief options, so you must take the time to evaluate all possible solutions thoroughly. An LIT can help you determine the best situation for you.


A Licensed Insolvency Trustee also oversees bankruptcy and involves assigning a trustee to manage your case. This trustee takes control of your assets (with exceptions), oversees your affairs, and supervises your bankruptcy obligations, including mandatory credit counselling sessions and monthly income and expense reporting. Upon fulfilling these duties, you attain debt discharge after either 9 or 21 months.

Debt Management Plan (DMP)

In a DMP, a credit counsellor assesses your debts and creates a multi-year repayment plan spanning three to five years. The proposed plan is presented to your creditors, and if they accept, you make a single monthly payment to the credit counselling agency. The credit counsellor may negotiate a reduced interest on your debt, redirecting the savings toward debt repayment. Participation in a DMP is voluntary for your creditors, so it is possible you can’t unite all creditors under one plan.

It’s crucial to note that a DMP does not involve debt reduction or cancellation; you must still settle your entire debt. Importantly, this distinction sets it apart from a consumer proposal.

Consolidation Loan

A debt consolidation loan combines multiple small loans or debts into a new single loan. This service achieves various goals, such as paying off smaller debts or consolidating higher-interest debts into a single payment with a lower interest rate spread over an extended period.

However, it is essential to understand that this approach does not eliminate your debt but makes it more manageable. Moreover, eligibility for a consolidation loan requires an application and qualification process.

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See What Your Debt Repayments Might Look Like

Our debt calculator provides a comparison of what your monthly debt repayment might look like under different debt relief options including a debt consolidation loan, debt management plan and consumer proposal



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