Toronto Consumer Proposal & Licensed Insolvency Trustee | Fong and Partners Inc.

Consumer Proposal Toronto – A Complete Guide

What is a consumer proposal, and is it my best option?

If you’re looking to consolidate your debts, one option available is to file a Consumer Proposal in Toronto. This is a legal settlement under the Bankruptcy and Insolvency Act between yourself and your unsecured creditors to pay back a portion of the debt you owe.

A Consumer Proposal can only be filed and managed by a Licensed Insolvency Trustee . For the proposal to be legally binding, the creditors who are owed the majority of your debt must agree to the arrangement.

What is the cost of a consumer proposal?

You’ll pay an initial filing fee of $104.03, and if it’s accepted by your creditors, you’ll pay the settlement over up to 60 months. The amount of debt that you repay is based on your income and what assets you own.

Payments are made to your Trustee which deposits them into a trust account. The Trustee’s fees get paid by your creditors out of the trust account according to a tariff. This tariff is $1,500 plus 20% of the amount the Trustee distributes to your creditors every year.




The Pros and Cons of Filing a A Consumer Proposal

Pros Cons
  • It can significantly reduce the amount of debt you need to repay to your creditors and there is no interest during repayment
  • It will cost more than a bankruptcy, which is to be expected if you want to avoid being forced into bankruptcy
  • It can be an effective way of consolidating debt in Toronto if you have stable income and you have enough money in your budget to make the monthly payments
  • Your creditors must approve it. They will have 45 days to review your proposal and if they have no issues with it, it will be deemed to have been approved at the end of 45 days
  • Your creditors may request that you increase the settlement amount
  • It can be a good option if you don’t qualify for a debt consolidation loan at a bank due to poor credit
  • A proposal only deals with unsecured debts such as credit cards. It doesn’t affect secured debts which must be paid
  • It can be a good option if you have debts (like income taxes) that cannot be included in a debt management plan with a credit counseling agency
  • You can avoid bankruptcy which can be an advantage if you have assets
  • It doesn’t affect student loans if you  attended school in the preceding 7 years

Avoid Getting Ripped Off When You File a Consumer Proposal

A growing number of for-profit debt consulting companies and their sales people have started marketing consumer proposals as an easy way to get out of debt.

But the problem is that only a Licensed Insolvency Trustee can file and manage a consumer proposal. Debt consultants have charged thousands of dollars in fees to vulnerable, unsuspecting consumers only to refer them to a Trustee which already gets paid by their creditors from proposal payments.




A report issued by the Office of the Superintendent of Bankruptcy about debt relief companies which charge referral fees states that:

Debtors served by LITs who had ongoing relationships with debt consultants usually ended up paying thousands of dollars more for the administration of their insolvency than debtors who were not sourced through a debt consultant.

Typically, debt consultants required a consumer debtor to sign a fee agreement for consulting services prior to being introduced to a “selected LIT.”

Debtors typically understood the role of the LIT as being limited to meeting with the debtor to “file” the proposal developed by the debt consultant.

You should avoid dealing with Trustees which participate in these types of business relationships with debt consultants.

Please visit our Consumer Proposal FAQs page where we answer the most common questions about consumer proposals.

Bankruptcy Toronto – A Complete Guide

Filing for personal bankruptcy is something to consider if you are unable to solve your problems with a consumer proposal. For example, your income may be too low and/or or your debts may be too high to file consumer proposal that would be acceptable to your creditors.

What is bankruptcy?

Filing for bankruptcy is a legal process, regulated by the Bankruptcy and Insolvency Act, by which you’ll be relieved of all of your debts except for:

    • Secured debts such as a car loan or a mortgage
    • Student loans if you’ve been out of school for less than 7 years at the time of filing bankruptcy
    • Child support and spousal support payments that are in arrears
    • Fines such as traffic tickets
    • Debts acquired due to fraud or misrepresentation, such as welfare fraud

If you’re filing bankruptcy for the first time and your income is below a certain income threshold, your bankruptcy will last for 9 months after which you’ll receive an automatic discharge from bankruptcy.

What is the cost of filing for bankruptcy?

If your income is above the previously mentioned income threshold, your bankruptcy will last for 21 months after you’ll be required to repay some money back to your creditors out of your income – this is called surplus income.




What happens during bankruptcy?

During your bankruptcy, you’ll be required to attend 2 financial counselling sessions with the Trustee and you’ll need to keep a record of your monthly income and expenses so that your Trustee can calculate  your surplus income payments, if any.

What happens to my income tax refund?

Your Trustee shall also be required to prepare and file your tax return for the year you filed bankruptcy. Any tax refunds are property of your bankruptcy estate and are sent to your Trustee by the Canada Revenue Agency.

Please visit our Personal Bankruptcy FAQs page where we answer the most common questions about filing bankruptcy.

Looking for the best Toronto Licensed Insolvency Trustee?

Fong and Partners Inc. is rated as one of the best Licensed Insolvency Trustees in Toronto according to www.ThreeBestRated.ca. Our Toronto Licensed Insolvency Trustee office is located at Suite 1007-2 Carlton Street, on the northeast corner of Carlton and Yonge Street. If you are arriving by TTC, our office is right by College subway station.




When you first contact us, we’ll book you an appointment with with Victor Fong, our Licensed Insolvency Trustee. We’ll also inform you what information you should bring to your meeting at our Toronto office.

At the meeting, we shall listen to your situation and based on the information you’ve provided, we’ll provide you with your options, which could include:

If you want to work with a Trustee who will give you confidence and peace of mind, look any further.

Contact Fong and Partners Inc., one of the 3 Best Rated Trustees in the Greater Toronto Area.

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Want to work with us? Our promise to you…

  • You will be in constant contact with a real Licensed Insolvency Trustee.
  • Your calls will always be returned.
  • Your emails will never be ignored.
  • We will work with you to craft an affordable payment plan that makes sense for your budget.

Contact  Our Toronto Office

Fong and Partners Inc
Suite 1007-2 Carlton Street
Toronto, Ontario M5B 1J3
T: 416.260.3264
help@startingovertoronto.com

licensed insolvency trustee toronto - consumer proposal toronto