This provision of the Bankruptcy and Insolvency Act allows you to pay off your debts, usually over a three year period, and clears you from credit harassment and wage garnishment. Unlike bankruptcy, you do not lose your assets under this program. To be acceptable, your creditors must be better off under a Proposal than if you go bankrupt. The consumer proposals cannot be for more than five years. If the creditors do not accept the Proposal the debtor is not automatically Bankrupt.
Counselling is required.
There is no restriction on the amount a person owes. If the creditors do not accept the Proposal the person is automatically bankrupt effective back to the date of the filing of the Proposal. Counselling is not required.