Understanding a Consumer Proposal in Lloydminster, Saskatchewan: A Comprehensive Guide

Consumer debt has become a rising concern in Lloydminster, Saskatchewan. If you are grappling with debt and looking for a potential solution, a Consumer Proposal in Lloydminster might be the answer. This article will guide you through the consumer proposal process, its benefits, drawbacks, and alternatives.

What is a Consumer Proposal?

A consumer proposal is a legally binding agreement between you and your creditors, designed to repay a portion of your debt. This process is governed by the Bankruptcy and Insolvency Act and is only administered by a licensed bankruptcy trustee.

Lloydminster, SK Consumer Proposal Office

How Does it Work?

Let’s take a closer look at the consumer proposal process.

Step 1: Consultation

The first step is to consult with a licensed insolvency trustee (LIT). The LIT will assess your financial situation, including your income, assets, and debts.

Step 2: Proposal Preparation

Based on your financial status, the LIT will prepare a consumer proposal. This proposal will outline how much of your debt you can afford to repay over a set period, usually up to five years.

Step 3: Proposal Submission

The LIT will then submit the proposal to your creditors. For the proposal to proceed, creditors representing the majority of your debt must approve it.

Step 4: Debt Repayment

Once approved, you will begin to make monthly payments to the LIT, who will distribute the funds to your creditors.

Advantages of a Consumer Proposal in Lloydminster

A consumer proposal offers several benefits, including:

  • Debt Reduction:
    A consumer proposal can significantly reduce your debt.
  • Single Monthly Payment:
    All your debts are consolidated into a single, manageable monthly payment.
  • Protection from Creditors:
    Once the consumer proposal is filed, all actions from creditors, including wage garnishments, are halted.
  • No Asset Liquidation:
    In most cases, you get to keep your assets.

Disadvantages of a Consumer Proposal

Despite its benefits, a consumer proposal also has downsides:

  • Public Record:
    A consumer proposal is a public record and is included in a searchable database.
  • Cost:
    The cost of filing and administering a consumer proposal can be high.
  • Limited Coverage:
    Secured debts and student loans less than seven years old cannot be included.
  • Credit Score Impact:
    Your credit score will be impacted negatively.

How to Avoid Consumer Proposal Scams

Unfortunately, consumer proposal services have become a target for scams. Here are some tips to avoid getting ripped off:

Only Deal with Licensed Trustees:
In Canada, only a licensed bankruptcy trustee is legally allowed to administer consumer proposals.

Avoid Upfront Payment:
Never pay money to anyone for consumer proposal services except a licensed bankruptcy trustee.

Understand Compensation:
Find out how the person helping you is compensated. Be wary of those who work on commission.

Impact on Credit Score

Filing a consumer proposal will impact your credit score. The note of your proposal remains in the public records section of your credit report. Your creditors may also report a “7” rating on any debt included in your proposal, indicating that they are receiving your payments through a third party.

Alternatives to a Consumer Proposal in Lloydminster

A consumer proposal is not the only option for dealing with debt. Alternatives include:

Debt Consolidation:
This process involves combining all your debts into one, making it easier to manage repayments.

Debt Management Program:
A Debt Management Program can consolidate your payments, eliminate interest rates, and get you out of debt and back on track.

Bankruptcy is a legal process designed to provide individuals dealing with financial hardship a fresh start.


Finding the right solution for your debt problems can be challenging. However, understanding the ins and outs of a consumer proposal in Lloydminster can help you make an informed decision. Remember, it’s okay to ask for help. Contact a professionally certified Credit Counselor today to explore your options.

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