In a proposal you list all of your debts and together with the trustee a plan is developed to:
- reduce your debts
- stop further accumulation of interest
- stop collection calls and garnishees of wages
- renegotiate the loan and payments
In a consumer proposal, an insolvency trustee works with you to create a payment plan to get you out of debt.
The administrator (licensed insolvency trustee) then goes to your creditors and explains that you are unable to pay the amount owing and are looking to renegotiate the debt by reducing the amount owed and the time to pay.