Loans Mortgages Cards Banking Investing Tools Locations FX Insurance Learn ← Bad credit options Settle your debt for half. Keep what's yours. A consumer proposal is a legal agreement to repay a portion of your debt over up to 5 years. Filed by a Licensed Insolvency Trustee under Canada's Bankruptcy & Insolvency Act.
The 5 steps from filing to discharge 01 Free consultation Meet a Licensed Insolvency Trustee. Free, confidential.
02 LIT drafts your offer Typically pay 30–50% of what you owe over up to 5 years.
03 Creditors vote They have 45 days. Silent = yes. >50% of dollar-value must approve.
04 Pay your monthly Single fixed payment to the LIT, who distributes to creditors.
05 Discharge & rebuild After final payment. R7 on credit for 3 yrs. Fresh start.
Consumer proposal vs bankruptcy — at a glance CONSUMER PROPOSAL BANKRUPTCY
Length Up to 5 yrs 9–21 months
Cost 30–50% of debt ~$1,800–2,500 + surplus
Keep assets Yes Only exempt amounts
Credit hit R7 for 3 yrs after R9 for 6 yrs
Public record Yes (limited) Yes
Repeatable Yes Yes, but harsher
See the bankruptcy guide → What a consumer proposal does (and doesn't) ✓ WHAT IT DOES Stops creditor calls instantly Stops wage garnishment Stops interest accruing Keeps your house and car Combines all debts to one payment No public auction of assets ! WHAT IT WON'T Public record (Office of the Superintendent of Bankruptcy) R7 on your credit file 3 yrs after final payment Maximum unsecured debt: $250,000 Cannot include CRA payroll trust funds Cannot include support arrears Co-signers are still 100% liable Honest answers What percentage of my debt will I have to pay? − Most consumer proposals settle for 30%–50% of the unsecured debt total. Creditors approve when the proposal pays them more than they would get from your bankruptcy. The LIT calculates this number using your income, assets, and debts. Can my creditors reject the proposal? + Will a consumer proposal stop my wage garnishment? + Can I file a proposal with CRA tax debt? + How does this affect my spouse? +