Worrying about debt can strain your emotional well-being. A Formal Proposal offers an individual with the opportunity to arrange a settlement with their creditors while avoiding bankruptcy. Wage garnishments and other creditor actions will be stopped once the Proposal is filed. When an individual makes a Proposal, creditors are offered a percentage of what is owing to them, to be paid over a specified period. Once the majority of the creditors accept the Proposal, it is legally binding on all parties. A Consumer Proposal is a streamlined process available to individuals whose total debts do not exceed $250,000 (excluding any mortgage indebtedness on their personal residence). This type of Proposal does not require a meeting of creditors unless specifically requested by the creditors, and there is no automatic bankruptcy if the creditors reject the Proposal. Only a Licensed Trustee in Bankruptcy can act as the administrator or trustee of a Formal Proposal under the federal insolvency legislation.