Do You Have to Include All Credit Cards in a Consumer Proposal?

Understanding Consumer Proposals: Addressing Credit Card Debts

A common question that often arises when considering a consumer proposal is, “do you have to include all credit cards in a consumer proposal?” This article aims to provide a comprehensive answer to this query and explore other related topics.

Consumer Proposal: A Brief Overview

To understand the role of credit cards in a consumer proposal, it’s crucial first to grasp what a consumer proposal entails. Essentially, a consumer proposal is a legally binding agreement orchestrated by a licensed insolvency trustee between an individual and their creditors. This agreement involves the individual promising to pay a percentage of their debts over a specified period, which can be up to five years.

Role of Credit Cards in Consumer Proposals

Credit Cards with Outstanding Balances

When filing a consumer proposal, an individual is required to account for all their debts. This includes credit cards with outstanding balances. These debts are then addressed within the proposal, with the aim of reducing or eliminating the amount owed.

Credit Cards without Outstanding Balances

The question of “do you have to include all credit cards in a consumer proposal?” often arises in relation to credit cards that currently hold no balance. While these cards do not technically represent a debt, they must still be declared in the proposal. These are listed as contingent claims, meaning that while there is no apparent debt at the time of filing, should any unknown debt surface later, it would be covered under the proposal.

Impact on Credit Card Accounts

Closure of Accounts

Upon filing a consumer proposal, credit card providers are notified. In most cases, these providers will close the individual’s account, regardless of whether it has a balance or not.

Possibility of Keeping Accounts Open

While it’s rare, some credit card providers may allow an individual to keep their account open after filing a consumer proposal. However, this could lead to potential issues if the individual accumulates new debt on the card. If the consumer proposal fails and the individual needs to file for bankruptcy, this new debt could affect their ability to obtain an automatic discharge from bankruptcy.

The Aftermath of a Consumer Proposal

Financial Rehabilitation

The underlying goal of a consumer proposal is to provide individuals with a fresh start. This financial rehabilitation process often involves living without credit for the duration of the proposal.

Rebuilding Credit Post-Consumer Proposal

Once the consumer proposal has been completed, individuals can begin to rebuild their credit. This process should be approached with caution and careful planning to avoid falling back into debt.


In conclusion, when the question “do you have to include all credit cards in a consumer proposal?” is asked, the answer is yes. This includes credit cards with no current balance. While this process may seem daunting, it is an essential step towards financial rehabilitation and a fresh start.

Remember that every individual’s situation is unique. Therefore, it’s advisable to seek guidance from a licensed insolvency trustee or financial advisor for personalized advice.

Ultimately, a consumer proposal can provide a viable path to regain control of your financial health, allowing you to move forward with a clean slate and a renewed sense of financial freedom.

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