How to qualify for consumer proposal?

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To qualify for a consumer proposal in Canada, your total unsecured debt must be between $1,000 and $250,000—doubled if shared with a partner. Secured debts like mortgages aren’t included. You need to live in Canada or own property there, but citizenship isn’t required. A Licensed Insolvency Trustee will help, but choose carefully as not all are trustworthy. Trustees get paid by the lender and creditor and don’t advocate for Canadians in debt. LITs can also double bill your or charge you extra. Beware! Reach out via phone, text, or live chat if you have any questions.

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Qualify For Consumer Proposal Question

How to qualify for consumer proposal? I’m curious about the qualifications needed to file a consumer proposal. What do I need to be eligible?

From: Anonymous Question
Location: Milton, Ontario (ON)
Category: consumer proposal

Qualify For Consumer Proposal Answer

To qualify for a consumer proposal in Canada, there are a few things you should know. First off, your total unsecured debt needs to be between $1,000 and $250,000—double that if you’re filing with your partner. And just so you know, your mortgage and any other secured debts don’t count toward this. You need to either live in Canada or own property here—being a citizen isn’t a requirement. It’s crucial to show you’re in a bit of a financial jam, meaning you can’t pay off your debts with your current income, but you do need a stable income to handle the new monthly payments. If you’ve already been down this road, any previous consumer proposal must be settled before you dive in again. Plus, you’ll need to buddy up with a Licensed Insolvency Trustee (LIT) for this process. But remember, not every trustee deserves to star in your financial success story, so choose wisely!

Trustees get paid by the lenders and creditors and don’t advocate for Canadians in debt. LITs can also double bill you or charge you extra. Beware! Reach out via phone, text, or live chat if you have any questions.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

To qualify for a consumer proposal in Canada, you must meet the following criteria:

1. You must be an individual, not a corporation.
2. Your total debts must be less than $250,000, excluding your mortgage on your principal residence.
3. You must be unable to pay your debts when they come due or have the likely inability to pay your debts in the foreseeable future.
4. You must propose a settlement to your creditors that is better than what they would receive in a bankruptcy situation.

These requirements are outlined in the Bankruptcy and Insolvency Act (RSC 1985, c 11), specifically under sections related to consumer proposals (sections 66.1 to 66.35). For further details, you can reference the official legislation linked above.

From: OSB Helper

Related Questions to How To Qualify For Consumer Proposal

Here are the top 5 most frequently asked questions related to qualifying for a consumer proposal, based on common queries and concerns in the context of Canadian debt relief:

1. What is the maximum amount of unsecured debt I can have to qualify for a consumer proposal?

• The total amount of unsecured debt must not exceed $250,000, excluding the mortgage on a primary residence[1][3][5].

2. Do I need to be employed or have a stable income to qualify for a consumer proposal?

• Yes, you must have a stable source of income to ensure you can make the monthly payments[1][3][5].

3. Can I file a consumer proposal if I am currently bankrupt?

• Yes, you can file a consumer proposal if you are currently bankrupt, but certain conditions must be met, such as the bankruptcy not being currently active[3][5].

4. Can I file a consumer proposal jointly with another person?

• Yes, you can file a joint consumer proposal if you and the other person have similar debts and the total debt does not exceed $500,000, excluding the mortgage on your principal residence[3][5].

5. Do I need to consult with a licensed insolvency trustee to qualify for a consumer proposal?

• Yes, you must consult with a licensed insolvency trustee before you can file a consumer proposal[1][3][5].

If you have a question about debt see our debt questions or ask your own debt related question.

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