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Consumer proposals in Alberta, Saskatchewan and Manitoba.
A consumer proposal is a legal agreement that may allow you to settle your unsecured debt for less than you owe, with one fixed monthly payment, full creditor protection, and no loss of assets in most cases.
- Keep your assetsYour home, vehicle, and registered savings are protected in most proposals.
- One fixed monthly paymentInterest stops on the day of filing. No rate changes, no surprises.
- Collection calls stopA legal Stay of Proceedings takes effect the day your proposal is filed.
- Up to 60 months to repayPayments are based on what you can afford, not what you owe.
Only a Licensed Insolvency Trustee can file a consumer proposal in Canada.
What is a consumer proposal?
A consumer proposal is a legally binding agreement between you and your unsecured creditors. It is filed by a Licensed Insolvency Trustee on your behalf through the federal Office of the Superintendent of Bankruptcy.
Instead of paying back the full amount you owe, you propose a settlement, typically a reduced amount paid in monthly instalments over a period of up to five years. If creditors holding the majority of your debt by dollar value agree, following court approval the proposal becomes binding on all of them.
A consumer proposal is not a loan. You are not borrowing money to pay off debt. You are reaching a legal settlement directly with your creditors, administered by a federally regulated professional.
Who can file a consumer proposal?
Consumer proposals are filed exclusively by Licensed Insolvency Trustees. No other professional, not a debt consultant, a credit counsellor, or a debt settlement company, is legally permitted to file one on your behalf. This protection matters: it means the process is regulated, the fees are controlled, and you have rights throughout.
Why creditors often accept
Creditors generally prefer a consumer proposal to bankruptcy because they typically recover more money. If you were to declare bankruptcy, creditors might receive very little, or nothing at all. A proposal offers them a reasonable settlement while giving you a manageable path forward.
Filed exclusively by Licensed Insolvency Trustees under the Bankruptcy and Insolvency Act, and administered through the Office of the Superintendent of Bankruptcy.
Excluding the mortgage on your principal residence.
How a consumer proposal works.
Free confidential consultation
You speak with a Program Manager, not a salesperson. We review your debts, income, and assets. You leave knowing your options, with no obligation to proceed.
Full financial assessment
We gather a complete picture of your situation: your creditors, the amounts owed, your income, your assets, and any assets that may be protected under provincial exemptions.
Proposal drafted and filed
Your administrator prepares the proposal and files it with the Office of the Superintendent of Bankruptcy. The moment it is filed, you are legally protected from your unsecured creditors.
Creditors vote
Creditors have 45 days to vote. If those holding the majority of your debt by dollar value accept, following court approval, the proposal is binding on all creditors, including those who voted against it.
Two credit counselling sessions
Federal law requires two financial counselling sessions during your proposal. These are practical, not punitive. They focus on budgeting, credit rebuilding, and long-term financial stability.
Monthly payments
You make your agreed monthly payments for the term of the proposal (up to 60 months). You can pay more at any time, or pay the full balance early with no penalty.
Certificate of Full Performance
Once you have completed all payments and counselling sessions, you receive your Certificate of Full Performance. The included debts are legally discharged. That chapter is closed.
What debts may be included.
Consumer proposals deal with unsecured debt. Secured debts (those tied to an asset, like a mortgage or car loan) are handled separately. Here is a general guide to what may and may not be included.
- Credit card balances
- Personal loans and unsecured lines of credit
- Payday loans
- CRA income tax debt and HST/GST arrears
- Medical and dental bills
- Judgments and collection accounts
- Overdue utility bills
- Student loans (subject to specific rules; see note below)
- Secured debts (mortgage, vehicle financing) if keeping the asset.
- Student loans less than seven years old
- Child support and spousal support arrears
- Court-ordered fines and penalties
- Debts arising from fraud or misrepresentation
- Debts incurred through obtaining credit under false pretences
Who may qualify for a consumer proposal.
- You are an individual and are a Canadian resident or have assets or debts in Canada.
- Your total unsecured debts do not exceed $250,000 (excluding your mortgage).
- You are insolvent, meaning you are unable to meet your debt obligations as they come due, or your debts exceed the value of your assets.
- You are not currently an undischarged bankrupt.
- You have a source of income or assets that would allow you to make regular monthly payments over the term of the proposal.
Not sure if you qualify?
Most people who call us are unsure. That is exactly what the free consultation is for. We review your full situation: debts, income, assets, and goals, give you a plain-language assessment of every option available to you.
There is no cost and no obligation. If a consumer proposal is not the right fit, we will tell you that too.
The moment you file, the calls stop.
When your consumer proposal is filed, a Stay of Proceedings takes effect automatically under the Bankruptcy and Insolvency Act. This is not a request or a negotiation. It is a legal requirement your creditors must follow.
- Unsecured creditors must stop all collection calls, emails, and letters.
- Any active wage garnishments from unsecured creditors must stop.
- Existing legal actions by unsecured creditors must pause.
- Creditors cannot begin new legal proceedings against you.
- This protection takes effect on the day of filing, not when creditors vote.
How a consumer proposal affects your credit.
The accounts included in your proposal will be noted with an R7 rating on your credit report. A proposal filing is recorded separately. These records typically remain for three years after the date you complete the proposal, or six years from the date of filing, whichever comes first.
For many people, the practical impact on their credit is less significant than expected. If you are already missing payments or being pursued by collections, your credit score has likely already been affected. A consumer proposal gives you a structured path to resolution and, from there, a foundation for rebuilding.
Day of filing
Accounts included in the proposal are updated to R7. Interest stops. Collection activity stops.
Six months in
Many people are eligible to apply for a secured credit card. Consistent use and on-time payments begin building a positive credit history.
Three to five years
Most clients see meaningful credit improvement. Some qualify for unsecured credit, car loans, or other financing during this period.
After the proposal is removed from your report
The proposal record is removed. Your credit history from the proposal period, including any positive accounts you built, remains. Most people in good standing at this point qualify for standard credit products.
Consumer proposal vs. bankruptcy.
Consumer Proposal
Personal Bankruptcy
Your assets
Consumer ProposalKeep most assetsHome, vehicle, and savings are protected in most cases as long as secured payments continue.
Personal BankruptcyNon-exempt assets may be surrenderedProvincial exemptions protect some assets. A trustee will assess what applies to your situation.
Amount repaid
Consumer ProposalA negotiated portion of what you oweBased on what you can reasonably afford to pay over the term.
Personal BankruptcyBased on income and assetsSurplus income rules may require additional payments if your income exceeds OSB guidelines.
Interest
Consumer ProposalStops on the date of filing
Personal BankruptcyStops on the date of filing
Credit rating
Consumer ProposalR7 on included accountsTypically removed 3 years after completion or 6 years from filing, whichever is sooner.
Personal BankruptcyR9 on included accountsTypically removed 6 years after discharge (or 14 years for a second bankruptcy).
Typical duration
Consumer ProposalUp to 60 monthsMany proposals are structured for 36 to 60 months. Early payment is allowed with no penalty.
Personal Bankruptcy9 months minimum for first-time bankruptcy with no surplus incomeLonger if surplus income applies or if it is a second bankruptcy.
Self-employment
Consumer ProposalNo restrictionsYou can remain self-employed throughout your proposal.
Personal BankruptcyReporting requirements applyBusiness income is reported and may affect your payments.
Privacy
Consumer ProposalFiled with OSBAppears in the Insolvency database. Not typically disclosed to employers.
Personal BankruptcyFiled with OSBAlso appears in the Insolvency database. Same general disclosure rules apply.
Creditor vote required
Consumer ProposalYesMajority by dollar value must accept. Rejection is uncommon when proposals are prepared properly.
Personal BankruptcyNo
Neither option is universally better than the other. The right choice depends on your income, your assets, the nature of your debts, and your personal circumstances. A Licensed Insolvency Trustee will walk you through both options in your free consultation, with no pressure to choose either.
Get a sense of what you could save.
Our debt calculator gives you an illustrative estimate of what a consumer proposal might look like for your situation: the potential monthly payment and approximate savings. Your actual options depend on your full financial picture.
Household of two · Typical consumer proposal
Illustrative only. Real figures depend on income, assets, and creditors. Use the calculator or book a consultation for your actual numbers.
Why work with a Licensed Insolvency Trustee.
Federally licensed and regulated
Day Group Inc. is licensed by the Office of the Superintendent of Bankruptcy Canada. LITs are the only professionals legally permitted to administer consumer proposals and bankruptcies in Canada.
Obligated to act in your interest
A Licensed Insolvency Trustee has a legal and ethical obligation to act in your interest, not your creditors’. Debt settlement companies and for-profit credit counsellors do not have the same obligation.
Fees regulated by law
LIT fees for consumer proposals are set by federal regulation. There are no upfront charges, no hidden costs, and no commissions. Your trustee’s compensation is built into your proposal payments.
Day Group Inc. is a Licensed Insolvency Trustee regulated by the Office of the Superintendent of Bankruptcy Canada, serving Alberta, Saskatchewan, and Manitoba. LIT licence number: 4172. This page is for informational purposes and does not constitute legal or financial advice.
Frequently asked questions.
Will I lose my home or my car?
In most consumer proposals, you keep your home and your vehicle. Consumer proposals deal with unsecured debt. As long as you continue making your secured payments (your mortgage and car loan), those assets are generally not at risk.
Provincial exemptions in Alberta, Saskatchewan, and Manitoba also protect certain assets from creditors. Your Program Manager will review what applies to your situation during your free consultation.
How much does a consumer proposal cost?
Your trustee’s fees are built into your monthly proposal payments. You do not pay anything upfront. The Office of the Superintendent of Bankruptcy regulates how trustees are compensated, so there are no hidden charges or commissions.
The free consultation is genuinely free. There is no cost and no commitment to proceed.
Can I include CRA tax debt in a consumer proposal?
Yes. In most cases, income tax debt owed to the Canada Revenue Agency can be included in a consumer proposal. This is one area where a consumer proposal has a significant advantage over many other debt relief options. Lenders will not typically approve a consolidation loan to pay out tax debt, and credit counselling agencies cannot include CRA debt in a debt management plan.
Once a consumer proposal is filed, CRA must stop collection activity along with all other unsecured creditors.
How long does a consumer proposal take?
Consumer proposals can be structured for any period up to 60 months. Most are arranged over 36 to 60 months, depending on what represents a fair offer to creditors based on your income and assets.
You can pay off your proposal early at any time with no penalty. Many people do this when their financial situation improves.
What happens if creditors reject my proposal?
Rejection is uncommon when a proposal is prepared properly. If creditors do not accept, your trustee can work with you to amend the proposal and resubmit, or explore other options including bankruptcy.
What happens if I miss a payment?
If you miss three monthly payments over the term of your proposal, it is automatically annulled. It is important to communicate with your trustee early if you are facing difficulty, as an amendment to the proposal may be possible before that point.
Can my employer find out about my consumer proposal?
A consumer proposal is not reported to your employer. The filing appears in the Office of the Superintendent of Bankruptcy’s insolvency database, but employers do not receive notification and it does not appear on standard employment background checks in most cases.
Can I pay off my proposal early?
Yes. There are no penalties for making extra payments or for paying your proposal off in full before the end of the term.
Today is the day.
The first conversation costs nothing and comes with no obligation. A Licensed Insolvency Trustee will review your situation and tell you exactly what is available to you.