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Consumer Proposal in Toronto

If you live in Toronto and your debt has grown faster than your income, you have legal options that do not involve bankruptcy. A Consumer Proposal lets you settle what you owe for a reduced amount, on a schedule you can actually afford, with legal protection from collection calls and wage garnishment from the day it takes effect.

  • Serving Toronto, North York, Scarborough and Etobicoke
  • Stop collection calls and wage garnishment
  • Keep your home, your car and your RRSPs
  • One reduced monthly payment, up to five years
  • A law firm, not a trustee. We act for you alone
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What Is a Consumer Proposal in Toronto?

A Consumer Proposal is a formal agreement under the federal Bankruptcy and Insolvency Act that settles your unsecured debt for less than the full balance. It is available to anyone in Toronto carrying between $10,000 and $250,000 in unsecured debt, and it applies the same way across the city, from the downtown core to Scarborough and Etobicoke.

Toronto households face a particular squeeze. Housing costs consume a larger share of income here than almost anywhere else in the country, which leaves less room to absorb a job loss, a rate increase, or a run of credit card interest. Ontario consumer insolvency filings rose 14.7% in the first quarter of 2026, and Toronto accounts for a substantial share of that. If you are in that position, you are not an outlier.

At Metus Lykos Debt Law Firm we are lawyers, not Licensed Insolvency Trustees. A trustee is legally required to stay impartial between you and your creditors. Our duty runs to you and no one else.

What Debts Can Be Included in a Toronto Consumer Proposal?

Credit Cards

Lines of Credit

Bank Loans

Payday Loans

Overdrafts

CRA Tax Debt

Student Loans (if out of school > 7 years)

Medical Debt

Personal Loans

Collection Agency Debt

Joint Debts

Business Credit (if personally guaranteed)

Debts NOT Included

Child Support

Spousal Support

Court Fines

Secured Loans (Mortgage, Car Loan)

Student Loans Under 7 Years

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How a Consumer Proposal Works in Toronto

The process is federal, so it runs the same way in Toronto as anywhere else in Canada. What changes is who is standing beside you while it happens. Here is what it looks like from your side.

01

Free, confidential consultation

We review your debts, income, assets and goals. Meet us at our Markham office, or handle it entirely by phone or video if you are downtown or working shifts. You leave knowing exactly which options apply to you.
02

We work out what you can realistically afford

Your payment is based on your income, your household size and what your creditors are likely to accept. Toronto housing costs are part of that calculation, not an afterthought.
03

We negotiate with your creditors

As lawyers, we press for terms that are fair and defensible before anything is filed. Most Toronto creditors are large national lenders who deal with proposals constantly, and knowing how they assess them matters.
04

We coordinate with a Licensed Insolvency Trustee

Only a Licensed Insolvency Trustee can file a Consumer Proposal. That is federal law and it applies everywhere. We coordinate the filing and continue to represent your legal interests throughout.
05

Your creditors vote

Creditors have 45 days to vote. Approval is by majority of dollar value, not headcount, and most proposals are accepted. From the moment of filing, a legal stay stops collection calls and wage garnishment.
06

One reduced payment, then you are done

You make a single monthly payment for up to five years. You keep your home, your car and your registered savings. When the final payment clears, the remaining balance is legally discharged.

Consumer Proposal in Toronto: Pros and Cons

Pros

The benefits of a consumer proposal

  • Settles your unsecured debt for less than the full balance
  • Stops collection calls and wage garnishment once filed
  • You keep your home, your car and your RRSPs
  • One fixed monthly payment, no compounding interest
  • Lighter credit impact than bankruptcy (R7, not R9)
  • Your payment cannot rise if your income does
  • No court appearance required in the ordinary course
  • Available across Toronto and the surrounding GTA

Cons

The disadvantages of a consumer proposal

  • Appears on your credit report for three years after completion
  • Requires steady enough income to sustain the payments
  • Creditors must approve it by majority of dollar value
  • Secured debts such as your mortgage continue as normal
  • Missing three payments can void the proposal entirely

Is a Consumer Proposal Right for You in Toronto?

  • A Consumer Proposal may be right for you if:

  • You owe between $10,000 and $250,000 in unsecured debt

  • You live or work in Toronto or the surrounding GTA

  • You have income but cannot cover more than the minimum payments

  • Collection calls or a wage garnishment have started

  • You want to keep your home, your car and your savings

  • You want to avoid bankruptcy if there is any way to

  • You want a lawyer acting for you, not an impartial administrator

If your debt is above $250,000, or the debt sits inside a business, a Division 1 Proposal may apply instead. If you would prefer to settle in a single lump sum rather than over several years, debt settlement is the faster route. Our Ontario Consumer Proposal guide covers the province-wide picture.

We reduce your debt. Not your dignity.

Consumer Proposal Toronto FAQs

No. What matters is where you have lived for most of the year before filing, since that determines which province's asset exemptions apply. If you live anywhere in Ontario we can act for you, whether you are in Toronto, Markham, Mississauga or further out.

In most cases yes. Your mortgage is a secured debt and sits outside the proposal, so you keep paying it as normal and keep the home. A Consumer Proposal does not require you to surrender assets, which is one of the clearest differences from bankruptcy.

Yes. Once the proposal is filed a legal stay of proceedings takes effect and most collection action must stop, including wage garnishment by unsecured creditors. This is one of the most common reasons Toronto clients call us.

It depends on your income, your household size and what your creditors will accept. There is no fixed formula and anyone quoting one without seeing your numbers is guessing. Our debt repayment calculator gives you a starting estimate.

In the ordinary course, no. A Consumer Proposal is an administrative process under the Bankruptcy and Insolvency Act, not a court proceeding. Court involvement only arises in unusual circumstances, and we handle it if it does.

Yes. Income tax, HST and GST arrears and COVID benefit repayments can generally be included. CRA is treated as an unsecured creditor and votes like any other, though debt tied to fraud or misrepresentation may not be releasable.

A trustee is required by law to act impartially between you and your creditors. That is their duty and it is not the same as representation. We are a law firm. Our duty runs to you alone. Our comparison of trustees and debt lawyers sets out the difference.

A Consumer Proposal runs up to five years, and you can finish early by paying it out. Creditors vote within 45 days of filing, and the legal protection starts immediately on filing rather than when the vote closes.

Call us before the deadline to respond passes. A filed proposal stays most lawsuits by unsecured creditors, but timing matters and an unanswered claim can turn into a default judgment.

Our Service Area

Real Debt Help, Wherever You Are in Ontario

Metus Lykos Debt Law Firm proudly serves clients across the entire province of Ontario. Wherever you call home, our lawyers are ready to review your situation and explain your legal options — confidentially, and free of judgment.

Toronto

Markham

Mississauga

Brampton

Ottawa

Hamilton

London

Windsor

Don't see your city listed? We work with clients across all of Ontario, in person and remotely. If you live in the province, we can help.

Take the First Step Toward Becoming Debt-Free

Find out whether a Consumer Proposal is the right route for you. Book a free, confidential consultation with a Toronto debt lawyer. No pressure, no obligation, and no judgement about how you got here.

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