Consumer Proposal Eligibility
Who is eligible for a consumer proposal?
Consumer proposals can only be administered by licensed bankruptcy trustees. You must meet with a trustee in your area to determine your consumer proposal eligibility.
Those interested in filing a consumer proposal must meet the following requirements:
You must be 18 years of age.
You must be insolvent.
To be insolvent means you are unable to pay your debts, either through your income or the sale of assets. If you’re having a difficult month due to unusual circumstances but can ordinarily manage at least the minimum payments on your bills, you are not considered insolvent. You must be unable to pay your bills for a reasonable period of time in order to be deemed insolvent.
Your debt must fall in the approved range.
Eligibility rules state the total of your unsecured debt must fall between $5,000 and $250,000, not including the mortgage on your primary residence. Note: If you owe more than $250,000, you should speak to a trustee about the requirements of a Commercial, or Division 1 Proposal.
You must have a stable source of income.
In order to be eligible for a consumer proposal, you must be employed and able to make consistent payments each month. Most people who are approved for consumer proposals have good jobs, but their debt payments are so excessive with interest they still find it difficult to make timely payments.
You must be an individual.
Businesses and corporations are not eligible to file a consumer proposal. Help is available for businesses in the form of a commercial or Division 1 proposal, also administered by a trustee.
You must have no other proposal proceedings pending.
If you have previously filed a consumer proposal or other filing with the court, it must be discharged before you can file a new consumer proposal. You cannot have more than one pending proposal at a time. If you have failed to complete a proposal in the past, you cannot file a new proposal until all the debts included are satisfied or discharged by the court.
How do I find out if I’m eligible?
Only a licensed trustee in bankruptcy can tell you if a consumer proposal is right for you. Your initial consultation with a trustee is free of charge. After a thorough review of your finances, your trustee will be able to determine your consumer proposal eligibility. A trustee will also be able to make recommendations on other debt relief alternatives that might be available to you.