Consumer Proposal Markham

Generally, yes. CRA tax debt can be rolled into a consumer proposal alongside things like credit cards and lines of credit.

For proposal purposes, the CRA counts as an unsecured creditor, bundled with your other debts and given a vote like any other lender. This matters because tax debt grows fast through interest and penalties, and the CRA can garnish your paycheque or freeze your bank account without going to court first. A proposal stops that immediately.

Eligible amounts usually include personal income tax, GST/HST you owe personally, and CPP/EI overpayments. Payroll deductions or GST/HST a business collected in trust are treated differently, since they aren’t your own debt.

It does, though the effect is more limited and temporary than most people assume and considerably milder than a bankruptcy.

During the proposal, your file is marked with an “R7” rating, which simply flags that you’re repaying debts through a formal arrangement. Bankruptcy carries an “R9” instead, the worst possible rating, which can linger on your file for as long as 7 years.

The R7 flag disappears 3 years after your last payment, no matter the length of your proposal. Scores often take a hit before filing (usually from missed payments), but plenty of Markham residents find their credit starts climbing again once payments are steady and creditors stop calling.

Only a Licensed Insolvency Trustee can legally file one for you—it can’t be done independently or through a private debt company. The typical steps look like this:

1. Meet with an LIT for a free assessment.
2. They evaluate your debts, income, and expenses to see if a proposal fits.
3. A formal proposal is drafted, offering partial repayment over up to 5 years.
4. It’s filed with the Office of the Superintendent of Bankruptcy, instantly halting calls and garnishments.
5. Creditors vote within 45 days; acceptance is the norm.
6. You pay one fixed monthly amount, which the trustee forwards to creditors.
7. Two credit counselling sessions are required.
8. Your final payment clears the included debts for good.

Meeting with a Licensed Insolvency Trustee for the first time costs nothing, and you’re under no pressure to commit.

In this initial session, the trustee reviews your debt load, income, and assets, lays out every available option (consumer proposal, debt management plan, bankruptcy, or even just a budgeting fix), and gives you a fair estimate of potential monthly payments.

Because LITs answer to federal regulators, they must present all your choices fairly rather than steering you toward one. If you come across anyone charging money upfront just to “review” your debt, or rushing you toward a decision, be cautious—the Government of Canada warns against unlicensed advisors billing for guidance; a real trustee provides free of charge.

Filing a consumer proposal doesn’t come with a big upfront bill. Instead, the expense is folded into the monthly payments you’re already making.

Your payment is worked out using your income, necessary living costs, family size, and any assets that could otherwise be at risk in a bankruptcy. The trustee’s compensation, which is set by legislation rather than open to negotiation, comes out of that same payment—there’s no add-on invoice.

Drafting, filing, and the creditor vote itself don’t cost extra, and the required credit counselling sessions are bundled in as well.