Common Questions About Consumer Proposals

Consumer Proposal FAQs

If your debts are spiraling out of control, it’s time to take action.

There are many ways you can tackle your debt, and in Canada, a consumer proposal could help you deal with unmanageable, significant debts.

Consumer proposals are unfamiliar to many people, but they can be a useful way of handling your debts.

Find out more about consumer proposals with these common questions about consumer proposals.

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What is a consumer proposal?

If you’re having difficulties paying your debts, then a consumer proposal is a process you can undertake to make offers to your creditors to pay them back on more affordable terms.

This could be through extending your payment terms, reducing interest, and reducing the amount that you owe.

Payments will be made over a fixed period of time, and your debts will be cleared once complete.

To be able to file for a consumer proposal, you will need to go through a licensed insolvency trustee.

What debts qualify for a consumer proposal?

A consumer proposal can include all debts from unsecured creditors.

This includes credit card debts, personal loans, store cards and others.

It can’t be used for secured loans such as a mortgage or a car loan.

Your creditors will vote on whether or not to accept terms, and if the majority are in agreement, then they will all be bound by these terms.

You can file both individual and joint consumer proposals, so if you have shared debts with your partner, there are solutions in place to help you both become debt-free.

What are the benefits of a consumer proposal?

There are many benefits that come with a consumer proposal.

For those dealing with debt and feeling stressed or threatened by repeated communications from creditors, a consumer proposal will put an end to letters and phone calls.

Unlike bankruptcy, you won’t have to give up some of your assets to file a consumer proposal.

How much does a consumer proposal cost?

Most licensed insolvency trustees provide a free consultation.

Any fees associated with the administrative costs are combined with your monthly repayments – these fees are decided by the government ensuring fairness.

Your monthly repayments are calculated based on your affordability to make sure you can budget around them.

How does a consumer proposal affect my assets?

Under a consumer proposal, you would not lose assets like your home or your car.

You will still need to keep up the repayments on these assets, in addition to those set out by your proposals.

Other assets, such as an RRSP (Registered Retirement Savings Plan), would also be protected.

In most cases, RESPs (Registered Education Savings Plan) and TFSAs (Tax-Free Savings Account) would also be protected.

It’s important to understand what would happen to each of your personal assets before you file for a consumer proposal.

Your trustee will be able to discuss this with you.

How long will a consumer proposal stay on my credit file?

A consumer proposal will stay on your credit file for three years after completion.

It takes between 1 and 5 years to complete a consumer proposal.

Once you’ve completed your consumer proposal, you’ll be able to start rebuilding your credit file, which could require taking on small amounts of credit to help build up trust with lenders once again.

Once the three years post-completion is up, the record of your consumer proposal will be removed.

What duties do I need to fulfill for a consumer proposal?

As part of the conditions for filing a consumer proposal, you’ll need to fulfil; certain details, including providing information as required to your trustee.

Meanwhile, you’ll need to attend two credit counselling sessions.

These are aimed to help avoid further financial difficulties, while also helping you to rebuild your credit rating.

It’s important to carry out the duties outlined by your trustee.

A failure to comply could lead to your consumer proposal becoming withdrawn.

Can I repay a consumer proposal early?


If you receive a lump sum or an increase in salary, etc., you can increase your monthly payments or make a repayment in full to complete your consumer proposal early with no fee.

The sooner you repay your consumer proposal, the sooner you can start rebuilding your credit rating.

Even repaying small additional amounts could bring your repayment term down and help you move on with your life.

How can I file for a consumer proposal?

To file for a consumer proposal, you’ll need to get in touch with a licensed insolvency trustee.

A licensed insolvency trustee will be able to assess your circumstances and make sure that a consumer proposal is the right course of action for you.

Following this, they’ll be able to file the consumer proposal on your behalf, and make sure that you fulfill all of your duties as part of your agreement.

A licensed insolvency trustee will be able to outline all of your options, in case other processes such as debt consolidation or bankruptcy are more applicable to your circumstances.

The avenue you take is up to you ultimately, but a trustee will be able to outline the best course of action depending on what they learn from you.

If you’re looking for a solution to mounting debts, then Bankruptcy Canada can help.

With a free consultation to get you started, you can start working your way towards becoming debt-free today.

Taking the first step is the hardest part, and things might not improve until you take some positive action.

Find a local licensed insolvency trustee near you and find out whether a consumer proposal could help you clear your debts.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal

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