What if Circumstances Change After Filing a Consumer Proposal?

Understanding Consumer Proposals

A consumer proposal is an official process under the Bankruptcy and Insolvency Act, offering a compromise to creditors. It essentially allows you to pay back a percentage of your debt, and the rest is forgiven. The terms can be flexible, but they must provide better recovery to your creditors than if you were to file for bankruptcy. A consumer proposal also enables you to keep your assets and won’t affect your credit rating as severely.

Possible Changes in Circumstances

Many individuals are apprehensive about filing a consumer proposal due to the potential for negative changes in their circumstances. Events like job loss, marital separation, or health problems can all lead to decreased income and increased expenses, impacting your ability to maintain your consumer proposal. But, what if circumstances change after filing a consumer proposal? There are several options available.

Implications of Defaulting on Your Proposal

If you miss three payments in total, you’ll be in default of your consumer proposal, and your administrator will alert your creditors of their renewed right to pursue you for payment. However, if you haven’t previously missed a payment, you might have a little flexibility—you can miss two payments without affecting the proposal. In such a situation, it’s crucial to communicate with your administrator about potentially delaying a payment.

Options for Amending Your Proposal

If your financial circumstances have permanently changed and negatively affected your cash flow, you can consider amending your proposal. To do this, get in touch with your Licensed Insolvency Trustee. They will reassess your assets, surplus income payments, and cash flow to determine if the payments in your proposal can be reduced to a more affordable amount.

Declaring Bankruptcy

If you find that you can’t complete the terms of your consumer proposal, you can file an assignment in bankruptcy. This step is a significant decision and should only be considered after exploring all other options and consulting with your Licensed Insolvency Trustee.

Paying Off Your Proposal Sooner

If you find that you have surplus funds through monthly savings or an unexpected windfall, you can always pay your proposal off sooner. Doing so will shorten the length of time the proposal remains on your credit rating, ultimately leading to a faster recovery for your financial health.

The Role of A Licensed Insolvency Trustee

Your Licensed Insolvency Trustee is there to support you through the entire consumer proposal process. They are your primary point of contact for any questions or concerns you may have about completing your proposal terms. Always reach out to them if you’re unsure or need guidance.


While the prospect of changes in circumstances after filing a consumer proposal can be daunting, remember that options are available. Whether it’s amending your proposal, declaring bankruptcy, or paying off your proposal sooner, each option has its advantages and drawbacks. Consult with your Licensed Insolvency Trustee to find the best path forward.

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