Which Debts Can Be Included in a Consumer Proposal?
The debts that can be included in a consumer proposal are usually unsecured debts, such as credit cards, lines of credit, personal loans, payday loans and income tax debts. All of these debts must be owed to creditors and not to individuals. This means that debts owed to family members, friends, or landlords cannot be included in a consumer proposal.
Secured debts, such as mortgages and car loans, are not eligible to be included in a consumer proposal. This is because the creditor has a secured interest in the property or asset, and so the debtor must continue to make payments on these loans.
In order to decide if a consumer proposal is the right solution for a debtor, they must ensure that all of their debts are eligible to be included in the proposal. The Licensed Insolvency Trustee (LIT) will be able to explain which debts can and cannot be included in the proposal and provide advice on how to best manage their debts.