Filing a Consumer Proposal

Learn the legal process of filing for a consumer proposal.

  1. Debt Help
  2. Debt Consolidation Services & Options Canada – Credit Card, Debt Settlement, DMP
  3. Filing for a Consumer Proposal - Disadvantages & Advantages

File a Consumer Proposal
What It Is & How It Can Help With Your Debts

Filing for a consumer proposal is a legal process, done through a bankruptcy trustee. It can be used to deal with your debts when you don’t qualify for or have been declined for a debt consolidation loan, a debt management program, and you don’t want to go bankrupt.

How to File a Consumer Proposal
Talk to a Bankruptcy Trustee

Only a bankruptcy trustee can file a consumer proposal on your behalf. The way it works is that your trustee sends out a “proposal” to your creditors asking that they accept payment of less than the full amount of your debt. Creditors holding the majority of your debts must agree to the proposal for it to work, and not all debts are eligible to be included.

You may need to seriously consider declaring bankruptcy if enough of your creditors don’t agree to the consumer proposal.

If the majority of your creditors accept the bankruptcy trustee’s proposal then you would have the opportunity to repay less than the full amount of your debt within 5 years. 

Looking And Considering At More
If you aren’t able to consistently make your payments on this program, your proposal would collapse and you couldn’t file another one. With your financial future at stake, it is also worth checking out other options to consolidate debt.

Advantages and Disadvantages of Filing for a Consumer Proposal

There are many advantages and disadvantages that you should be aware of before you go through with filing a consumer proposal. It is important to consider your situation and the impact this legal process will have on your credit rating in the future.


  1. No interest
  2. Repay less than you owe
  3. Pauses active collection on student loans
  4. Alternative to bankruptcy


  1. It’s not private. A proposal is a matter of public record
  2. It’s not as fast and easy as sometimes advertised
  3. Not all creditors will accept your proposal
  4. A typical Consumer Proposal is repaid over 4 to 5 years
  5. If you default (miss 3 payments), you’re not able to file another proposal
  6. Is reported on your credit report and typically negatively impacts your credit score for 6 years
  7. 1 out of 5 people who successfully pay off their Consumer Proposal end up needing to repeat the process in the future
  8. A fee of around $1,800 is usually charged

Canada’s Other Debt Consolidation Options
Loans, Mortgages, Credit Cards, DMP, Settlement, Borrowing Money & More

You might be wondering what to do because you’ve been declined for a debt consolidation loan. Below is more information about consolidating your debts with a debt consolidation loan, as well as many other options.

However, if you’re feeling overwhelmed and just need someone to give you some guidance about the best options for dealing with your debts based on your financial situation, don’t hesitate to contact us and ask us your questions. We’re happy to help by phone, 1-888-527-8999anonymous online chat, or email

Contact Us for More Information About Filing for a Consumer Proposal

Filing for a consumer proposal is just one step away from bankruptcy. Since it is a legal process, you may want to talk to one of our Credit Counsellors or your bank before you start the process. You can find more information on any of the links above or on this page about debt consolidation options and advice. We are also here to help and our service is free and confidential.

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