Reduce your debt with a consumer proposal

What is a consumer proposal?

A popular bankruptcy alternative, a consumer proposal, is a legal repayment agreement negotiated with creditors to settle your unsecured debt (credit cards, income tax debt, payday loans, etc.). Your Licensed Insolvency Trustee (LIT) will work with you to offer creditors a percentage of what’s owed and/or modified repayment terms based on what you can afford.

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The advantages of filing a consumer proposal

A consumer proposal is ideal for anyone who can repay some of their debt. The advantages of a consumer proposal are:

  • The amount you pay is determined by what you can afford.
  • You'll likely only repay a portion of what you owe.

  • Payments can either be monthly or in lump sums (with some exceptions).
  • Once filed, interest charges, legal actions, garnishments, and collection activities stop.

  • Creditors can no longer attempt to garnish your wages.
  • You'll likely keep all your assets, including your car, house, and RRSPs.

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Do I qualify for a consumer proposal?

Consumer proposals are federally regulated and require you to meet the following requirements, such as:

  • You must reside in Canada or own assets in Canada.

  • You must be insolvent, which means that you can't meet your financial obligations as they come due, or your debts exceed the value of your assets.

  • You must have unsecured debt.

Talk to one of our Licensed Insolvency Trustees or debt solutions professionals to see if a consumer proposal is right for you.

How much will I need to repay?

Every person’s situation is unique, and consumer proposals are customized to meet your needs. After reviewing your income, assets, and debt, your Licensed Insolvency Trustee will propose an amount for repayment and present it to you and your creditors. If approved by your creditors, the amount you repay will typically be less than the amount initially owed, potentially by up to 80%. Your monthly payment will include all trustee fees.

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How do I file a consumer proposal?

Only a Licensed Insolvency Trustee (LIT) can file a consumer proposal on your behalf. If your LIT determines that a consumer proposal is the right step for you, you'll work together to draft a proposal to your creditors.

Take the first step to debt freedom

Speak to one of our debt solutions professionals during a free, no-obligation consultation.

Your questions answered

Yes. If you can continue to maintain payments, assets such as your home and car won’t be impacted by a consumer proposal.

Debt consolidation and consumer proposals are both ways to simplify debt payments. Consolidation loans combine debts into one monthly payment, but they may have high interest rates and fees, and you must repay 100% of the debt.

Consumer proposals are administered by Licensed Insolvency Trustees and offer lower monthly payments with the possibility to reduce your debt by up to 80%. They also have more favourable terms with 0% interest.

A consumer proposal will settle all unsecured debt such as (but not limited to):

  • credit cards
  • personal lines of credit
  • personal loans
  • payday loans
  • income taxes

A consumer proposal doesn’t cover secured debt (such as your mortgage or car loan).