What is a Consumer Proposal in Saskatchewan?

Understanding Consumer Proposals in Saskatchewan

Consumer proposals have emerged as a popular method for people in Saskatchewan to manage their debt. But what exactly is a consumer proposal and how does it work? This article will delve deeper into the concept of consumer proposals, their advantages and disadvantages, and alternatives.

What Is a Consumer Proposal?

A consumer proposal is a legal process, governed by the Bankruptcy and Insolvency Act. It’s a contract between you and your creditors to repay a portion of what you owe, based on your income and assets. This process can only be administered by a licensed insolvency trustee.

The amount to be repaid and the duration of the payment period are determined under the guidance of a licensed insolvency trustee. The proposal needs approval from creditors who own the majority of your debt to be legally binding. The maximum repayment period for a consumer proposal is five years.

How to Qualify for a Consumer Proposal

A consumer proposal may be a suitable solution if you owe less than $250,000 (excluding your mortgage) and cannot pay your debts in full. You should also have enough income to make a single monthly payment and be looking for an alternative to bankruptcy.

Advantages of a Consumer Proposal

There are several benefits of opting for a consumer proposal:

  1. You pay back only a portion of your debt, based on what you can afford.
  2. It enables you to keep certain assets that might be lost in bankruptcy.
  3. It stops interest charges and offers a fixed monthly payment plan.
  4. Collection calls and wage garnishments are halted.

Disadvantages of a Consumer Proposal

Despite the advantages, there are some drawbacks to consider:

  1. The proposal becomes a matter of public record and is listed on a searchable database.
  2. It requires court approval and can be rejected by creditors.
  3. If you miss more than two payments, you may need to file for bankruptcy.
  4. Some debts, like secured debts and student loans less than seven years old, cannot be included.

Consumer Proposal Alternatives

Consumer proposals are not the only option for debt management. Other alternatives include debt consolidation, debt management programs, and in some cases, declaring bankruptcy.

Debt consolidation involves combining multiple debts into a single one, usually with a lower interest rate. This can simplify your payments and potentially save you money in the long run.

Debt management programs involve working with a credit counselling organization to negotiate lower interest rates with your creditors and establish a repayment plan.

In some circumstances, declaring bankruptcy may be the best option. This process eliminates most, if not all, of your debts, but it also has severe consequences for your credit and may require you to surrender certain assets.

Consumer Proposal Scams

While consumer proposals can be a legitimate and helpful tool for debt management, there are scams to look out for. Only a licensed insolvency trustee is legally allowed to administer a consumer proposal. Some companies may charge fees for consumer proposal services and then simply refer you to a trustee, who will also charge fees.

To avoid such scams, never pay for consumer proposal services to anyone other than a licensed insolvency trustee. Additionally, consider speaking with a non-profit credit counsellor before making any decisions. They can help you understand all your options and guide you towards the best solution for your situation.

Impact on Credit Rating

Filing a consumer proposal will have an impact on your credit rating. Once you start making payments through a consumer proposal, a note is placed on your credit report indicating that you have filed a proposal. This note will remain for three years after your last payment.


A consumer proposal can be a powerful tool for debt management in Saskatchewan, but it’s not for everyone. It’s important to fully understand what a consumer proposal entails, its advantages and disadvantages, and alternatives before deciding on this path. It’s also crucial to be wary of scams and to consult with a professional, such as a non-profit credit counsellor or a licensed insolvency trustee. By conducting thorough research and seeking professional advice, you can make the best decision for your financial future.

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