Do banks like consumer proposals?

The question “Do banks like consumer proposals?” often arises among individuals seeking debt relief options. In this article, we aim to debunk the myths and misconceptions about banks’ stance on consumer proposals, offering you an in-depth understanding of this debt solution from a creditor’s perspective.

Defining Consumer Proposals

A consumer proposal, as defined by law, is a legally binding agreement between a debtor and their creditors, facilitating a negotiation process where the debtor offers to repay a portion of their debt over a specified period.

Why Consider Consumer Proposals?

Consumer proposals offer several benefits, including the ability to retain assets that would otherwise be surrendered under bankruptcy and establish a manageable repayment plan.

Banks as Major Creditors in Consumer Proposals

From our analysis, it’s evident that banks often rank highly among the creditors involved in consumer proposals. This is because many individuals hold significant unsecured debts with their banks, making them major stakeholders in consumer proposal negotiations.

How Banks Evaluate Consumer Proposals

Banks, like any other creditors, evaluate consumer proposals based on their merit. They scrutinize the proposal’s details and compare the projected returns against potential bankruptcy proceeds. If the proposal promises higher returns than bankruptcy, it’s likely to get the bank’s approval.

Bank’s Expectations from Consumer Proposals

Banks expect reasonable proposals that align with the debtor’s financial capacity. If they feel the debtor can afford to offer more, they may request a revision. However, they also understand the need for the proposal to remain affordable to ensure its long-term success.

The Role of Your Budget in a Consumer Proposal

Your budget plays a crucial role when proposing a consumer proposal. Banks often review your budget to evaluate the reasonability of your offer. A well-prepared budget can significantly improve the chances of your proposal being accepted.

Minimum Acceptable Recovery Range

Though every creditor is different, some banks have a minimum acceptable range of recovery. This range varies among banks, but it’s crucial to offer a proposal that falls within this range to increase acceptance chances.

Bankruptcy Canadas’ Approach to Consumer Proposals

At Bankruptcy Canada, we take a comprehensive approach to consumer proposals. We scrutinize your budget, assess your financial situation, and ensure that the proposal is both affordable for you and likely to be accepted by your creditors. This approach has led us to achieve a 99% acceptance rate for all consumer proposals we file.


Consumer proposals are a viable debt relief option that banks and other creditors consider seriously. The key to an accepted proposal is its reasonability, affordability, and overall profitability compared to bankruptcy. If you’re struggling with debt, a consumer proposal could be the solution you need. Contact a licensed insolvency trustee for a free consultation today.

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