Why a Consumer Proposal Would Be Rejected

A consumer proposal is a legal process that offers a lifeline to many people struggling with debt. But what happens when that lifeline is retracted, and the consumer proposal is refused? As unsettling as it sounds, the likelihood of a consumer proposal being rejected is quite plausible. This article aims to shed light on the reasons why a consumer proposal would be rejected and explore the alternative paths to debt relief.

Reasons for Rejection of a Consumer Proposal

The rejection of a consumer proposal could be attributed to several factors. Here, we delve into the major reasons behind the refusal of a consumer proposal.

Insufficient Offerings

One of the most common reasons for the rejection of a consumer proposal is when the offer made to creditors is considered inadequate. Creditors will typically reject proposals that do not promise a substantial recovery of the debt owed.

Unsuitable Repayment Schedule

Another reason could be the proposed repayment timeline. If the creditors feel that the repayment schedule is too prolonged and does not align with their expectations, they might reject the proposal.

Extravagant Lifestyle or Negligence

Creditors may also reject a consumer proposal if they believe that the debtor’s financial predicament is self-inflicted. This could be due to an extravagant lifestyle or negligence of business affairs.


If a debtor is found guilty of fraud or any offence under the Bankruptcy and Insolvency Act, the creditors have the right to reject the consumer proposal.

Strategies to Get Your Consumer Proposal Accepted

In case your consumer proposal is initially rejected, your Licensed Insolvency Trustee (LIT) can assist you in renegotiating the terms with your creditors. Here are some steps that you can take to get your consumer proposal accepted:

  1. Revise your monthly payment – The amount that you agree to pay back each month could be adjusted based on your income and affordability.
  2. Modify the total repayment amount – The creditors might agree to the proposal if you increase the total amount you are willing to repay.
  3. Amend the length of repayment – Often, creditors prefer to recover their money sooner. Therefore, proposing a shorter repayment period could increase the chances of your proposal getting accepted.

Alternatives to Consumer Proposal

If your consumer proposal is continually rejected, you might want to consider alternative options for debt relief. Here are some of the most popular choices:

Debt Consolidation Loan

A debt consolidation loan merges multiple debts into a single loan, often at a lower interest rate. It simplifies debt management by consolidating multiple monthly payments into one.


Bankruptcy is a drastic measure and often considered the last resort for debt relief. In bankruptcy, non-exempt assets are handed over to a Licensed Insolvency Trustee for liquidation, and the proceeds are used to repay the creditors.


Indeed, the rejection of a consumer proposal can be disheartening. However, it is essential to remember that there are always other avenues to explore for debt relief. If your consumer proposal is rejected, do not lose hope. With the right guidance and support from an experienced LIT, you can find a solution that works for you.

Remember, the road to debt relief might be challenging, but it’s not impossible. So, don’t let the fear of rejection deter you from making a fresh financial start. Why a consumer proposal would be rejected should not discourage you. Instead, use it as a stepping stone to better financial health.

Sign up for a free consultation today, and let us help you navigate your path to debt freedom. You owe it to yourself.

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