Home Ownership During a Consumer Proposal

Home Ownership While Undertaking a Consumer Proposal

The journey towards financial stability can be challenging, especially when insolvency is part of the picture. It is an undeniable fact that a significant number of individuals and families have to grapple with the realities of insolvency and the need to resort to financial recovery options such as a Consumer Proposal. One of the most concerning aspects of this process is the fate of one’s home. This article will delve deep into the intricacies of home ownership during a Consumer Proposal and provide insights on how one can navigate this challenging period without losing their home.

Understanding a Consumer Proposal

Before we delve into the main subject, it’s essential to understand what a Consumer Proposal entails. A Consumer Proposal is a legal agreement set up by a licensed insolvency trustee between you and your creditors. This agreement allows you to pay back only a portion of your debts, extending the payment period, or both. The primary goal is to alleviate the financial burden and offer a viable route towards regaining financial stability.

The Big Question: Can I Retain My Home?

The most pressing question for homeowners considering a Consumer Proposal is whether they can keep their homes. The straightforward answer is: Yes, it is possible to retain your home during a Consumer Proposal. However, several factors come into play.

Staying Current with Your Mortgage Payments

The key to retaining your home during a Consumer Proposal is to stay current with your mortgage payments. As long as your mortgage payments are up to date and the housing costs fit within your budget under the proposal, you should be able to keep your home.

Declaring Your Home as an Asset

During the Consumer Proposal process, you will need to declare your home as an asset. Your licensed insolvency trustee will then determine the equity you have in your home. This equity assessment will help them determine the offer you should present to your creditors under your proposal.

Option to Surrender Your Home

If, after careful consideration, you decide that maintaining the home is not financially viable, you can choose to turn it over to your bank when you file your proposal. In such a scenario, any money still owed to the bank after the property’s sale will be included in the proposal terms.

Selling Your Home to Fund Your Proposal

Another option available to you is selling your home to fund your proposal. You can use the proceeds from the sale, after settling your mortgage, to pay part or all of what you agree to pay your creditors. Such a move could put you in a favorable position to negotiate your Consumer Proposal.

Keeping Up with Mortgage Payments

Should you decide to keep your home, it will be your responsibility to keep your mortgage payments up to date. These payments are separate from any payments made to your trustee under your proposal.

Selling or Refinancing Your Home

Even after filing your Consumer Proposal, you still have the freedom to sell or refinance your home during your proposal period. However, this should be done carefully, considering the implications it could have on your financial recovery process.

What If Your Creditors Refuse Your Proposal

In some instances, creditors may refuse your proposal. In such situations, it would be prudent to seek advice from your trustee on the next steps. There are several alternatives to explore, and with the right guidance, you can navigate this process successfully.


Embarking on a Consumer Proposal can be a daunting journey, but with the right information, you can navigate this process without losing your home. It’s always advisable to consult with a licensed insolvency trustee to understand your options and make informed decisions that will lead you towards financial recovery.

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