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Is There A Debt Minimum For A Consumer Proposal?

Debt Level Eligibility – Requirements For A Consumer Proposal

A consumer proposal can be a less drastic option than bankruptcy, but you do have to be eligible to make this agreement with your creditor.

As stated in Section 2 of the Bankruptcy and Insolvency Act, you first need to be considered as an ‘insolvent person.’

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To be eligible, the following needs to be true:


  • You owe a minimum of $1000 to your creditors;
  • You are unable to make your payments, for whatever reason;
  • Your assets, if they have been sold, are not enough to cover the cost of your debts.


While it is unlikely that somebody would file a consumer proposal when owing as little as $1000, you are still permitted to do by law.

The point of a consumer proposal is to make sure your debts are more manageable.

Provided your debt minimum is $1000, you can use our services to make a claim.

It is a legally binding process between you and your creditor, and after coming to an agreement, you should be free of a lot of the worry that your debt may have brought you.

You might have the financial freedom to manage your other monthly payments, for example, such as your rent or mortgage.

You will also experience fewer sleepless nights worrying about your debt, as you will have some peace of mind knowing that your debt has become manageable.

The advantages of a consumer proposal also include:


  • The interest on your debts will be frozen while you file
  • You need only repay a portion of your debts
  • Your repayments will be lower than what they might be currently


To find out other advantages of a consumer proposal, get in touch with one of our Government Licenced Insolvency Trustees for an evaluation of your particular needs.

What Is The Minimum Payment Requirement In A Consumer Proposal? 

By law, there is no minimum repayment limit. However, when considering your consumer proposal, you do need to take a couple of things into account.

  1. Your creditors will want to recover as much of the debt as possible

Your creditors might accept your offer of a consumer proposal, but then again, if they were to receive more if you filed for bankruptcy, they might reject your proposal.

  1. Your creditors are bound by their policies

Most commercial lenders in Canada have internal policies in place regarding the minimum amount they will accept in a consumer proposal.

For many banks and large credit card companies, this usually equates to around 30% of your total debt.

So, if you decide against repaying 30% of your what you own, your creditor might not agree with your proposal.

By taking these two things into account, you will improve your chances of success if you offer to repay the minimum expected by your creditor.

To find out more, speak to one of our licensed trustees.

When looking at the debts you owe, we will advise you as to the minimum amount you should offer to pay back your creditors, and we will draw up the consumer proposal with you, ensuring that it meets your needs while meeting the expected requirements of your creditor.

Your Consumer Proposal Claim

A consumer proposal will allow you to spread out your payments over a fixed period of up to 5 years.

We will discuss a payment plan with you and will offer enough to your creditor to increase the chances of your proposal being accepted.

Negotiating with some creditors can be tricky, but we have enough experience to deal with those that might disallow certain proposals and will come up with figures that are both pleasing to you and them.

Ultimately, creditors know that a proposal will increase their revenue, so as long as it is not less than the fees they would be expected to pay, the chances of your proposal being accepted will be high.

We will break down the figures for them and will demonstrate how your proposal will benefit them, so this should reduce the chance of them turning it down.

To find out more, give us a call today.

Our Licensed Insolvency Trustees are experts in all matters relating to consumer proposals and other debt-relief solutions, so contact one of our trustees near you, and get the help you need to fix your debt problem.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Consumer Proposal Eligibility
How to Amend a Consumer Proposal

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