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What Debts Can Be Included in a Consumer Proposal?

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  • Sep 22, 2022
  • 2 min read

Updated: Jul 14, 2023

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If you want to get rid of your debt, you might be thinking if a consumer proposal is the best option for you. After all, a consumer credit proposal may enable you to get debt relief and protection from creditors as an affordable repayment plan.


It's important to be aware that consumer proposal filing can only include a limited number of debts. To learn about what debts can be included in a consumer proposal, just keep on reading this article!

 

Debts Included in a Consumer Proposal

With a consumer proposal, unsecured debt is forgiven. Any sort of debt that is not supported by an asset, such as a house, is referred to as an unsecured debt. You are permitted to include the following debts in a consumer proposal:

  • Credit cards

  • Lines of credit

  • Personal loans

  • Payday loans

  • Certain student loans

  • Income tax debts

If your total debts do not exceed $250,000, you can submit a consumer proposal as a method of debt relief (not including mortgages on a principal residence). Additionally, a Division I proposal is another choice accessible to consumers under the Bankruptcy & Insolvency Act if your unsecured debts total more than this amount.

 

Can You Include Student Loan Debts?

As long as you have been out of school for at least seven years, student loans will be immediately erased in a consumer proposal, just like they would be bankrupt. After that, your proposal includes your student loan debt, which will be paid off once all of your payments have been made.


You may still be able to get rid of your student loan debt by submitting a consumer proposal even if you haven't stopped being a student for at least 7 years.


Your other debts will be cancelled by a consumer proposal. As a result, it's possible that your cash flow could improve to the point where paying down your student loans will be simpler.

 

Can You Include Business Debts?

An individual submits a consumer proposal to address legally obligated personal debts. Debts owing by a corporation are not covered by a consumer proposal.


Your consumer proposal can cover any debts you have that are related to your business if you are self-employed or run a small, unincorporated firm. Small business debts can be settled through a consumer proposal if the total amount owed is less than $250,000 and the debt total is below that amount.


You might include your personal culpability in your proposal if you have been asked to repay a business debt that you guaranteed. Similarly, a consumer proposal may incorporate HST and source deduction duties.

 

Know What Debts to Include In Your Consumer Proposal

When creating your consumer proposal, it's important to know which debts to include and which to leave out. Now that you've read this article, you can perfect your consumer proposal and get some debt relief.


To learn more about consumer proposals in Belleville and surrounding areas, please contact F. J. Zielski & Associates Inc!

 
 

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