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How a consumer proposal could benefit you
A consumer debt proposal is the only debt settlement program sanctioned by the Canadian government. This makes it a safer debt settlement solution than informal options. A debt proposal provides several benefits as follows:
- Reduce your debts by up to 90%;
- Keep all your assets including any equity in your home;
- Consolidate debts into one, affordable, monthly payment;
- Freeze interest on your debts;
- Legally bind all creditors to your offer including payday lenders and the Canada Revenue Agency;
- Avoid bankruptcy;
- Stop calls from collection agencies and wage garnishments.
What will we do? What will we do?
- Stop all collection calls and legal action immediately, protecting you legally from the companies you owe money to.
- Immediately freeze interest and late fees on your debts.
- Negotiate the largest debt reduction that is fair, working with you on what you can afford.
- Provide credit counselling focused on your financial health.
What our customers are saying. We've helped thousands of people, just like you, find a solution suited to their needs
“Debt Advice Ontario is fantastic. Kind, empathic and non-judgemental. They are life savers they helped with all my debts and worries with a plan that I never ever thought possible. I wish I’d found you sooner”
“I was very impressed by both their concern and helpfulness. It’s a weight of my mind and they have stopped my creditors from calling and sending me constant letters. Thank you”
“They changed my life with their advice and I can look forward to living debt free, something I could never have done on my own. Supportive staff who listen first then offer choices so I could choose the best option for myself. I felt in control and positive about how I am handling my debts.”
Why choose us? We've helped thousands of people get out of debt Why choose us? We've helped thousands of people get out of debt
Expert team of debt specialists here to help you
Confidential advice on all debt matters
Convenient offices staffed with friendly local advisors
Frequently Asked Questions
A consumer proposal is a viable alternative to declaring bankruptcy in Canada. Choosing the right solution depends on your specific situation. The main benefits of a consumer proposal in Ontario include:
- you keep your assets
- you make one lower monthly payment
- it’s a government program
- it provides creditor protection and court approval
- there are early payment options
- you avoid bankruptcy
- You do not surrender assets in a consumer proposal, including tax refunds.
- Monthly payments are usually lower in a bankruptcy.
- A proposal requires the pre-approval of your creditors through a voting process. Bankruptcy is automatic although your creditors can oppose your discharge.
- Payments in a consumer proposal are negotiated up front. Bankruptcy payments are defined by legislation and can increase if your income increases.
- You can pay off a consumer proposal early. Bankruptcy has a pre-defined length determined by legislation.
- A consumer proposal has fewer required duties than bankruptcy. For example, there is no requirement to report your income and expenses monthly in a consumer proposal.
You must offer more than what your creditors would expect to receive in total in a bankruptcy scenario to satisfy your creditors. When determining how much to pay, the trustee will look at:
- What you own and what you earn to determine how much would be available to your creditors in a bankruptcy.
- Your budget to determine that you can afford the payments.
There are no extra or up-front fees. Your LIT or consumer proposal administrator is paid out of the amount you agree to pay your creditors. The cost for filing a consumer proposal is covered by your agreed upon proposal payments and are not a separate charge.
There are three rules of thumb for a successful consumer proposal:
- You must offer more than creditors would receive in a bankruptcy.
- It must meet the minimum expectations of your creditors.
- Your payments must be affordable.
At Debt Advice Ontraio we have a 99% acceptance rate.
Once your proposal documents are signed they will be electronically filed with the government and your creditor protection starts. At that time, you stop making payments to your creditors.
- A consumer proposal is approved if a majority of creditors (based on the dollar value of proven claims) vote yes after which it is approved by the Court.
- A meeting is required if at least 25% of your unsecured creditors ask for one (based on the dollar value of proven claims).
- Creditors have 45 days to vote or request a meeting.
- Failing to vote is considered a yes vote.
It is possible to negotiate to try to obtain agreement.
Payments in a consumer proposal can be spread over a maximum of 60 months. If you can afford more each month, you can shorten your proposal term or offer a lump sum payment. Consumer proposal payments are interest free no matter how long the term of your proposal, up to a maximum of five years.
Yes. Unsecured tax debts are included in a proposal and CRA is bound by the terms of an accepted proposal.
Yes. A consumer proposal is a legal proceeding under the Bankruptcy and Insolvency Act that provides a stay of proceedings that immediately stops all creditor actions including most wage garnishments and calls from creditors and collection agencies. Once you sign your proposal documents, they will be electronically filed with the government and you immediately gain protection from your creditors.
You can defer up to two payments.