Consumer Proposal Toronto: Costs, Process, and Licensed Trustees (2026)

A consumer proposal in Toronto lets you legally reduce unsecured debt by 30–80%, stop collection calls immediately, and pay a fixed amount over up to 5 years — filed exclusively by a Licensed Insolvency Trustee with no upfront cost.

Consumer Proposal in Toronto: What You Need to Know in 2026

Toronto leads Ontario in consumer insolvencies — 3,201 filings in 2024, up 18% year-over-year. Of those, 83% were consumer proposals rather than bankruptcies. If you’re carrying $10,000 or more in unsecured debt and struggling with minimum payments, a consumer proposal may be the most practical legal tool available to you.

This page covers the real costs, timelines, and process for Toronto and GTA residents in 2026.

What a Consumer Proposal Actually Does

A consumer proposal is a legal offer to your creditors, filed through a Licensed Insolvency Trustee (LIT), to repay a portion of what you owe — typically 30–50 cents on the dollar — over up to 60 months. Once creditors representing 50%+ of your debt vote to accept, the remaining debt is legally erased.

What it stops immediately (within 48 hours of filing):

• Wage garnishment
• Bank account freezes
• Collection calls
• Lawsuits and judgments
• CRA collection action

What it does not affect:

• Your mortgage (keep paying and keep your home)
• Your car loan (keep paying and keep your car)
• Child support obligations

Toronto-Specific Costs and Payment Estimates

Toronto’s high cost of living creates some of the highest average debt loads in Canada. GTA residents filing proposals in 2024 carried an average of $42,000 in unsecured debt.

Estimated monthly payments based on typical Toronto scenarios:

Estimates. Actual amount depends on your income, assets, and what creditors accept.

Your proposal payment must be at least what creditors would receive in bankruptcy — called the bankruptcy dividend. A Licensed Insolvency Trustee calculates this for free during your initial consultation.

Qualifying for a Consumer Proposal in Toronto

You qualify if:

• Total debt is under $250,000 (excluding your mortgage)
• You have some income or assets to fund a proposal (even EI qualifies)
• You’re insolvent — meaning you cannot pay debts as they come due

Most Toronto residents who come to a trustee with credit card debt, CRA arrears, or a line of credit they can’t clear qualify without issue. The consultation is free and confidential — there’s no obligation to file.

High-Risk Debt Situations in the GTA in 2026

Toronto-specific pressures are accelerating consumer insolvencies:

• Condo special assessments — owners hit with $15,000–$40,000 unexpected fees are maxing credit cards to bridge
• Mortgage renewal stress — GTA residents renewing 2020–2021 mortgages face payment jumps of $800–$1,400/month, pushing unsecured debt payments aside
• Tech and Bay Street layoffs — high earners with $60,000+ in unsecured debt from lifestyle spending now facing income gaps
• CRA pandemic repayments — CERB/CEWS clawbacks still landing; CRA is the #3 creditor in Toronto proposals

How to File a Consumer Proposal in Toronto

1. Free consultation — Call or book online with a Licensed Insolvency Trustee in Toronto. Review your debts, income, and assets. No charge, no obligation.
2. Proposal preparation — Your LIT prepares the legal documents, calculates a fair offer, and files with the OSB. The stay of proceedings begins immediately.
3. Creditor vote — Creditors have 45 days to vote. Creditors representing 50%+ of dollar value must accept. Over 99% of proposals pass.
4. Monthly payments — You make one consolidated payment to the trustee each month for 48–60 months (or less if you pay early).
5. Certificate of full performance — When your last payment clears, you receive a legal discharge. The remaining debt is gone.

Finding a Licensed Insolvency Trustee in Toronto

Only a Licensed Insolvency Trustee can file a consumer proposal in Canada. Avoid debt settlement companies that charge fees upfront or claim to offer “proposals” without a trustee — they cannot file legal proceedings.

Toronto has 25+ licensed firms across the GTA, including offices in downtown Toronto, Scarborough, North York, Etobicoke, Mississauga, and Brampton. All initial consultations are free.

Use our Find a Licensed Insolvency Trustee tool to locate trustees by city or postal code.