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A consumer proposal is a popular alternative to bankruptcy. It’s a legally binding agreement between you and your creditors that helps reduce unsecured debt, including credit cards, income tax debt, and payday loans.
A Licensed Insolvency Trustee (LIT) works with you to propose an affordable repayment plan to your creditors. If accepted, this debt relief option lets you repay a portion of what you owe in exchange for debt forgiveness.
A consumer proposal offers several advantages over other debt solutions, including bankruptcy and debt settlement—beyond reducing your debt by up to 80%.
Once filed, collection actions and wage garnishments stop.
You'll likely keep your assets, including your car, home, and RRSPs.
As a federally regulated debt solution, you must meet the following requirements:
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.
Your proposal is filed when the majority of your creditors agree to its terms. While consumer proposals generally have a high acceptance rate, every situation is unique and your experience may vary slightly from the below steps.
During your consultation, we assess your financial situation and recommend the best option to address your debt. If a consumer proposal is right for you, we review your income and expenses to estimate an affordable monthly payment. Your first appointment is always free, confidential, and judgment-free.
Next, we prepare the documents needed to submit your consumer proposal to your creditors, and you review everything before we file it. At this stage, we may ask for additional information to confirm your debts, income, and creditor details.
After you’ve reviewed and signed your consumer proposal, your trustee will file it with the Office of the Superintendent of Bankruptcy (OSB). Once filed, you’ll no longer pay your creditors directly, collection calls will stop, and your creditors can’t garnish your wages or take legal action against you for your debt.
Creditors have 45 days from the filing date to vote on your proposal. For approval, the majority of your creditors must accept the terms. Typically, proposals are accepted, as you’ll repay more of what’s owed to creditors—compared to bankruptcy.
If your creditors reject the proposal, your LIT may renegotiate the terms. If it’s rejected again, we’ll help you explore other debt relief options.
Once your proposal is signed, you’ll begin making either monthly or lump-sum payments to your trustee—who will pay your creditors on your behalf. You’ll have up to five years to complete your payments, but you can pay off the balance early if you’re able. You’ll also be required to attend two financial counselling sessions and meet any other conditions outlined in your proposal.
After you’ve fulfilled the terms of your consumer proposal, you’ll receive a Certificate of Full Performance. This marks the official end of your proposal and the beginning of your financial fresh start. You can now focus on rebuilding your credit and living debt-free.
Every person's debt situation is different. Our debt repayment calculator can help you understand your debt management options and estimated monthly payments.
A consumer proposal is a legal repayment agreement negotiated with your creditors to settle unsecured debts such as credit cards, income tax, and payday loans. In Canada, consumer proposals can only be administered by a Licensed Insolvency Trustee, who will work with you to offer creditors a percentage of what’s owed and/or adjust repayment terms based on what you can afford.
A consumer proposal is paid over a maximum of five years. If you’re able to, you can make larger, lump sum, or more frequent payments to finish the proposal faster.
As long as you don’t have joint debt, your family won’t be affected by your consumer proposal. If your spouse has co-signed or endorsed your debt, they’ll be equally responsible or solely responsible for maintaining payments after you file.
Children aren’t affected by a proposal, and you’ll continue to receive child benefit payments (if applicable). RESPs, however, aren’t a protected asset in some provinces, and can be seized to pay down your debt.
Yes, once you file your consumer proposal, all collection efforts on included debt stop. When you file, a “stay of proceedings” is issued, which legally prevents debt collectors from continuing any collection activity—including wage garnishment.
It may take creditors six to eight weeks to stop collection attempts, but your trustee will handle communication with them on your behalf. If a creditor continues to contact you, let your trustee know, and they’ll follow up directly.
We've helped thousands of Canadians take control of their finances and live happier, debt-free lives.
I was treated with kindness and respect during a difficult situation that was hard to maneuver on my own. I couldn't have made this fresh start without them. The trustees and associates and everyone involved made the experience as seamless and painless as possible. I highly recommend this business if you are struggling financially and need some guidance. I am over the moon pleased with Grant Thornton Ltd.
— Angelique W, Vancouver, BC
I was waiting so long dreading the call, but I put my shame aside and called. The lady that picked it up was a saint. She made it so easy, and I could tell she cared about me as a person and not a number. Thanks to the Grant Thornton team. Cheers!
— Mik, Passage, NS
They were always available, even during COVID-19, and responded to me with quick and concise answers to any and all of my questions. The kindness I was shown by the staff & Trustee of the Thunder Bay office was unmeasurable. They made my decision one of the best I could have made!
— Donna M, Atikokan, ON
My debt has been such a huge weight on my shoulders over the last few years. Finally, I made the move to deal with it. I am so happy I chose Grant Thornton, and extremely satisfied and over the moon happy to have their help. They made the process so much easier. Very knowledgeable and always readily available. Thank you so much for all your help.
— Darlene S, Calgary, AB
I want to express my heartfelt thanks to Carla Arellano for all of her help. She can never fully understand what a difference she has made in my life. "Thank you" just doesn't fully express what I want to say. I made a call to a different company simply to inquire about the process and found the response to be cold, impersonal and anything but reassuring. What a difference I experienced from the first phone call to Grant Thornton.
Thank you so much for your kindness, compassion, lack of judgement and reassurance. You provided me with excellent information and clearly explained my options. I am sure that many of your clients come to you feeling overwhelmed and carrying shame and guilt over the situation they have found themselves in. While that was how I was feeling about myself, I never felt any of that judgement from you, and that was a huge relief throughout this process!
— Anonymous
Speak to one of our debt solutions professionals during a free, no-obligation consultation.
LITs are the only federally regulated debt professionals qualified to offer solutions such as bankruptcies and consumer proposals. When you choose a LIT, you can be assured that you’re dealing with someone who‘s proven they have the knowledge, experience, and skills to help you make an informed decision about your finances.
Looking for assurance, tax, and business advisory services? Visit Doane Grant Thornton LLP.
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