How To Apply For A Consumer Proposal In British Columbia

Consumer Proposals In BC: Applying For a Debt Proposal

How To Apply For A Consumer Proposal In British ColumbiaYou may be grappling with financial strain due to mounting debt. Bankruptcy might seem like the only recourse, but it’s crucial to exhaust all available alternatives before considering it. This guide will assist you in comprehending the complexities of a Consumer Proposal, an often beneficial route for debt reduction.

Introduction to Consumer Proposal

A Consumer Proposal is a legally binding arrangement between a debtor and their creditors. It’s initiated by a Licensed Insolvency Trustee (LIT), outlining ways to settle debt repayments. This method can significantly reduce your debt, sometimes up to 80%.

A Consumer Proposal could be your key to a debt-free life, without sacrificing your assets.

Consumer Proposal vs. Bankruptcy

People often confuse Consumer Proposals with bankruptcy, but they differ in several key aspects. With a Consumer Proposal, there’s no need to forfeit your assets or declare bankruptcy. Unlike bankruptcy, it doesn’t necessitate the reporting of your monthly income or expenses.

What Debts Can a Consumer Proposal Cover?

The Consumer Proposal is a comprehensive debt relief solution, which can include a variety of unsecured debts. However, certain debts like car payments, mortgages, and child support payments may not be included. Generally, the following unsecured debts can be addressed:

  1. Credit card and line of credit debt.
  2. Tax debts.
  3. Student loans (if you’ve been out of school for seven years).
  4. Payday loans.
  5. Personal debts.
  6. Department store card debts.
  7. Overdraft fees.

The Four Stages of a Consumer Proposal

Filing a Consumer Proposal involves four stages, each guiding you from devising a payment plan to rebuilding your credit.

The Payment Plan

Initially, you’ll need to determine your monthly payments to your creditors. A trustee will estimate what your creditors might receive if you filed for bankruptcy. The payment in a Consumer Proposal is usually slightly more than this amount. You can choose to spread out these payments over a maximum of 60 months.

The Creditor Vote

Post-filing, your creditors have the opportunity to review the terms of your Consumer Proposal and vote. In most cases, they either accept the terms or request a renegotiation.

The Payment Process

Once your plan is approved, you can start making payments. You won’t need to report your income, but you will need to attend two credit counselling sessions. If possible, you may pay off your Consumer Proposal early.

The Credit Repair Process

Upon clearing your debts, you’ll receive a Certificate of Full Performance, which is forwarded to government credit bureaus. The notice on your credit report is removed three years after completing the payments.


Dealing with overwhelming debt can be crippling. However, options like Consumer Proposals offer a way out. If you’re a resident of British Columbia looking for help, Licensed Insolvency Trustees can provide legal expertise to navigate this challenging period.

Remember, you don’t have to struggle alone. Reach out for help and take the first step towards regaining financial stability.

For more information on How To Apply For A Consumer Proposal In BC, contact us today and let’s break the cycle of debt together.

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