EVALUATING A CONSUMER PROPOSAL

How to find out if a Consumer Proposal
is right for you

Consumer Proposal can reduce your debt - Toronto
A Consumer Proposal that's accepted
by your creditor can help reduce
your financial burden.

First step is to seek advice from a Morataya & Associates Certified Insolvency Counsellor who will review your current debt situation and carefully evaluate your options. If you are eligible, a Consumer Proposal is probably in your best interest to immediately start the process of stopping your debt from growing.

Consumer Proposal - How Does It Work?

To file a Consumer Proposal you can owe up to $250,000 (not including your mortgage of principal residence) and you must be unable to pay your debts in full. If over $250,000 a DIV1 Proposal applies.

At Morataya & Associates, we will go over your financial situation with you and give you the best advice about how to structure a proposal. We will take you by the hand from beginning to end.

By law, your creditors have 45 days to consider whether to accept, re-negotiate or reject your proposal. For your proposal to be accepted, creditors representing a majority of the dollar value of your debt must accept the offer (simple majority). For example; if your total debt is $30,000, creditors representing $15,001 of your debts are required for approval.

Only one monthly payment to all of your creditors

There will be only one monthly payment to all of your creditors. You must continue to make payments to your secured creditors (mortgage, car loan) as usual.

At Morataya & Associates, we do not want you to have financial hardship again.  During the process, we will show you how to budget, live within your means, learn to save, and protect your finances from any unexpected events.

If the proposal is rejected, we will contact your creditors to renegotiate new terms. In many cases, increasing your payment by a little bit more per month may be enough to get your creditors to accept the proposal. You also have the option of filing bankruptcy protection. Of course, your creditors know that if they don’t accept your proposal you may file bankruptcy, and that encourages your creditors to accept reasonable settlements.

Once a proposal is accepted, it is totally flexible; it can be paid as soon as you want. As soon as you make the last payment, you will be given a certificate of full performance and all of your unsecured debts included in your proposal will be erased.

If you fail to keep the terms of your proposal, such as missing 3 monthly payments, then the proposal may be annulled. Your creditors would have a claim against you for the amount owed to them before the proposal, minus any amount you paid them during the proposal.

Each situation is different, so we strongly recommend that you contact us to review your situation and help you calculate the terms of a Consumer Proposal given your specific circumstances.

Credit rating during the duration of the proposal and for three years after making last payment will be an R7 (R1 being the best and R9 being the worst).


"Gave me all the attention"

Morataya & Associates gave me all the attention and the assurance needed to overcome my debt problems. I do not regret following their advice precisely.

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