A Consumer Proposal (applicable in Ontario and all other Canadian provinces) is a formal agreement between you and your creditors. It includes an offer to your creditors to settle your debt for an amount that is less than the total amount owing. This can result in as much as a 70% debt reduction. More importantly, it allows you to keep your assets, your car and your home.
An example of paying off $ 100,000 in debt through Debt Consolidation vs. a Consumer Proposal:.With a Consolidation Loan of $100,000 (at 15% interest and monthly payments of $2,000), you would need to pay an additional $157,000 to get out of the same amount of debt. A Consumer Proposal avoids these additional cost: you would only need to pay $30,000 over 60 months to become debt free.