A Comprehensive Guide to Consumer Proposals in Fort McMurray, Alberta

As the popular saying goes, “Money talks. But it always sends bills.” It is crucial to understand the intricacies of your financial health, and one such financial tool is a Consumer Proposal. This guide provides comprehensive information about Consumer Proposals, especially focusing on Consumer Proposal in Fort McMurray, Alberta.

What is a Consumer Proposal?

A Consumer Proposal is a legal agreement under the Bankruptcy and Insolvency Act that allows you to consolidate your debts by repaying a portion of the amount you owe to your creditors. This amount is mostly determined by your income and assets.

However, it is important to know that only a licensed bankruptcy trustee can arrange and administer a Consumer Proposal. It usually costs around $1,500 to file, with an initial setup fee. If accepted by your creditors, the remaining balance is then payable. The trustee also retains 20% of your future payments as an administration fee.

The Process of a Consumer Proposal

A Consumer Proposal becomes legally binding when creditors holding the majority of your debt agree to it. Once they do, you are obligated to repay the agreed amount over a maximum period of five years.

Fort McMurray Consumer Proposal Office

Pros and Cons of Filing for a Consumer Proposal

Like any financial decision, filing for a Consumer Proposal comes with its own set of advantages and disadvantages. Let’s explore them in depth.


Significant Debt Reduction
: A Consumer Proposal can substantially lessen the amount of debt you have to repay your creditors.

Effective Debt Consolidation
: If you have a consistent income and can afford to make monthly payments, a Consumer Proposal can be an efficient way of consolidating your debts.

Halt on Student Loan Collection
: It can stop active collection activity on student loan payments.

Avoidance of Personal Bankruptcy
: A Consumer Proposal is one of the last methods to prevent personal bankruptcy.


Public Record
: A Consumer Proposal is a permanent public record included in a searchable database, making it less private.

Higher Cost
: It is more expensive than declaring bankruptcy.

Possibility of Rejection
: If your creditors reject the Consumer Proposal, you might have to offer them additional funds; otherwise, your proposal will not proceed.

Risk of Asset Sale
: You may need to sell some assets (such as your home, vehicles, or investments).

Impact on Professional Licenses and Employment
: The permanent record of your insolvency can put certain professional licenses at risk and may also affect future employment opportunities.

The Role of Debt Relief Companies

It is important to be aware of the role of debt relief companies. Some of these companies claim to offer Consumer Proposals as an easy way out of debt. However, only a licensed bankruptcy trustee can file for a Consumer Proposal. These companies charge exorbitant fees, only to refer you to a bankruptcy trustee who charges additional fees.

Tips to Avoid Getting Scammed

Here are some tips to ensure you don’t fall prey to such scams:


Consult a Non-profit Credit Counsellor
: They can review your situation and help you understand all your options.

Payment Only to a Licensed Bankruptcy Trustee
: They are the only ones legally allowed to provide these services and receive payment for them.

Ask about Compensation
: Many people advising you on your debts work on commission. Ensure their suggested “solution” is in your best interest, not theirs.

The Impact on Your Credit

Once you start making payments on a Consumer Proposal, a note is placed in the public records section of your credit report. This note is visible to anyone who you have permitted to view your credit report. Furthermore, creditors may also report a “7” rating on any debt included in your proposal, indicating they are receiving your payments through a third party.

Secured Debts and Consumer Proposal

If you are making payments to secured creditors (like for a car loan) outside of your Consumer Proposal, these creditors will report these debts separately. A realistic budget and a good payment history can help you maintain and rebuild your credit.

Consumer Debt Proposal Services in Fort McMurray

In Fort McMurray, there are numerous options between financial difficulty and bankruptcy. A Consumer Proposal might be a good option for some, but it’s not the best option for everyone. To find out what other options you have, consider speaking with a professionally trained Credit Counsellor.


Financial literacy is key to maintaining good financial health. It is essential to understand the options available to you when facing debt, and a Consumer Proposal is one such tool. It is crucial to consider all the pros and cons before deciding to file for a Consumer Proposal in Fort McMurray or anywhere else. Remember, there’s life beyond debt.

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