What Is a Consumer Proposal?
A consumer proposal is like a consolidation loan, in that your payments are reduced to one monthly payment. You make the payments to a trustee, who accumulates them and every six months pays the money out to your creditors.
The thing about a proposal is that it doesn’t necessarily involve paying pack 100 per cent of what is owed to the creditors. A proposal might just be a percentage. It’s basically making a new deal with creditors, so that they get paid to the best of your ability. The major difference between an informal arrangement with creditors and a proposal is that a proposal has the protections that are built into the law.