Consumer Proposals In Victoria

Consumer Proposals In Victoria

You may be familiar with or have never heard of a consumer proposal. When it comes to your finances, you might be curious what it is exactly and what it can do for you. Learn more about what you need to know and watch out for when it comes to dealing with Consumer Proposals in Victoria.

You won’t know if it’s the best option for your situation until you take the time to educate yourself on the matter further.

What You Need to Know

Filing a Consumer Proposal in Victoria is a debt repayment option that will allow you to consolidate your debts. It’s governed by the Bankruptcy and Insolvency Act and a legal process between you and your creditors to repay a portion of what you owe. They’ll take a look at what you own and your income to determine how much debt you’ll be asked to repay to your creditors. Your creditors must agree to the proposal for it to be legally binding. If they want to move forward, then you’ll have to repay the amount over a maximum term of five years.

It’ll cost you around 1,500 dollars and can only be set up by a bankruptcy trustee. Be prepared also to pay an initial setup fee and the balance to proceed, if accepted by your creditors. Your trustee will keep 20 percent of your future payments which is your consumer proposal administration fee.

Advantages & Disadvantages of Filing for A Consumer Proposal

There are a few advantages and disadvantages you should be aware that consumer proposals contain. Such as the following:


  • It can significantly reduce the amount of debt you have to repay your creditors.
  • It can be an effective method of debt consolidation in Victoria, BC if:
    • You can’t afford to repay all of what you owe.
    • You have stable income.
    • You have enough money in your budget to make monthly payments.
  • It will pause active collection on student loan payments.
  • Can be a good option if:
  • It is one of the last ways to avoid bankruptcy.


  • It’s not a private matter. A Consumer Proposal is filed as a permanent public record and is included on a searchable database.
  • It costs more than filing for bankruptcy.
  • The Court must approve it.
  • Creditors can choose to reject the proposal. If they do, you may need to offer them additional funds to convince them to proceed.
  • You might need to sell some of your assets (such as a vehicle, your home, or investments).

A Consumer Proposal & Your Credit

As stated above, filing a proposal is not a private matter. A special notation is entered on your credit report in the public records section as soon as you agree to a consumer proposal. The public records section can be seen and read by anyone who you allow to look over your credit report.

Your creditors may also report a “7” rating on any debt that’s included in the proposal. The “7” rating indicates that your creditors are receiving your payments through a third party, which in this case is your trustee. The information explains the process that’s occurring behind the scenes. You’re sending money to your trustee, and they’re distributing the agreed-upon amount to your creditors after all fees are paid out.

You may be keeping other unsecured debt payments such as a car loan separate from your consumer proposal. Payments on these debts will be reported on their own. It may help to keep a budget and records so that you can continue to make all your payments on time. You’ll be working to rebuild your credit when you can show that you’re able to keep up with paying secured debt off all while making your proposal payments.

Next Steps

Contact us at Bankruptcy Canada for more information about filing a consumer proposal in Victoria, British Columbia. We’re here to help and answer any further questions you have around the topic. Our experts are standing by ready to walk you through the process, costs, and next steps. A consumer proposal is one of many options from staying out of bankruptcy. Together, we can take a look at your situation and finances and advise you about how you should best proceed so that you can find financial freedom in the future.

To get an evaluation of your financial situation please don’t hesitate to contact us to learn more.

We can help you get out of debt.