File a Consumer Proposal

Debt Solution

Decreasing Debt with a Consumer Proposal

A consumer proposal is one of the best options for dealing with personal debt. This solution creates an agreement between you and those you owe money to (your creditors), outlining how you will repay your debts.

Consumer proposals are legal agreements governed by the Bankruptcy and Insolvency Act. A Licensed Insolvency Trustee (LIT) can only administer them. That’s where we come in – Crowe MacKay & Company’s LITs will work with you to develop a proposal for your creditors based on your financial situation.

Is a Consumer Proposal the Right Option for Me?

A consumer proposal is very flexible and tailored to fit your financial situation, allowing you to keep your assets, stop collection calls, and repair your debt – all while paying an amount you can afford.

What You Need to Know

What You Need to Know

To begin the proposal process, we will need to know the basics of your situation. Here’s a list of what you will need to provide to start:

Your current financial situation

How much you earn

Employment status

Your current debts and whom you owe money to

Your current assets

We know how much stress you are under, and that’s why we manage all the negotiations with your creditors, giving you time to take a breath. Working with a Crowe MacKay & Company LIT means getting a partner committed to your financial success.

What Debts Are Covered in a Consumer Proposal?

A consumer proposal usually covers all your unsecured debts, which may include the following:

Personal loans

Student loans (if more than 7 years has passed since your last date of schooling)

Credit cards

Payday loans

ICBC debt

Lines of credit

Medical bills

Tax debt

Am I Eligible for a Consumer Proposal?

To file a consumer proposal in British Columbia, you first need to determine your eligibility. To qualify for a consumer proposal, you must meet the following criteria:

  • You must be insolvent- BUT can make monthly payments to repay a portion of your debt
  • The total of your unsecured debts must not exceed $250,000 – excluding mortgages on your principal residence
  • Your debts must not have been included in any previous failed or currently active proposal proceedings

Consumer Proposal FAQs

What Are the Benefits of Filing a Consumer Proposal?

A consumer proposal is considered a better solution for both the debtor and the creditor than other debt-relief options. Filing a consumer proposal in Vancouver & Surrey allows you to repay a portion of your debt without giving up your possessions.

Apart from giving you a fresh start, here are some of the reasons why you should choose a consumer proposal:

Keep all your assets

One of the great benefits of a consumer proposal is that your assets are protected. You keep all your assets while eliminating your debts, including home equity, investments, vehicle(s), and tax refunds.

Get creditor protection

Being a legal process under the Bankruptcy & Insolvency Act, a consumer proposal offers credit protection, preventing you from getting calls from collection agencies and wage garnishments. Once the majority of your creditors (based on the dollar value of claims) approve your proposal, it is binding on all of your creditors.

Lower monthly payment

A consumer proposal is an agreement negotiated between you and your creditors where you will repay just a portion of your debt in full settlement and satisfaction of the balances owing. You are not required to pay interest during a consumer proposal, leading to substantial savings over a debt consolidation loan or second mortgage.

Avoid bankruptcy

Many people want to be relieved from debts but don’t want to file for bankruptcy. To find out your options, you should discuss filing a consumer proposal with a Licensed Insolvency Trustee. Creditors are more likely to accept a consumer proposal because it offers more than they would expect to receive in bankruptcy.

Pay off your debts early

The term of a consumer proposal is a maximum of five years. Should your financial circumstances improve, Consumer Proposal payments can be accelerated without incurring any penalty or interest charges, allowing you to repair your credit faster.

What Are the Key Differences Between a Consumer Proposal and Bankruptcy?

The key difference between personal bankruptcy and a consumer proposal lies in its impact on your assets. Although bankruptcy may be a quicker and cheaper way out of debt, you will have to surrender your assets to start fresh. On the other hand, when you file for a consumer proposal with your creditors, you can retain all your assets and get a chance to settle the debt fairly and responsibly.

Opting for a consumer proposal comes with many advantages. These include legal protection from your creditors, no collection calls, and a chance to settle on an affordable monthly payment that never increases. 

How Long Does it Take for a Consumer Proposal to be Approved?

Once drafted, the proposal is submitted to your creditors and the Office of the Superintendent of Bankruptcy (OSB) for consideration.  While every situation is unique, it takes aminimum of 60 days for a consumer proposal to be fully approved.

Creditors have 45 days to file a claim and vote for or against your proposal. 

Creditors holding at least 25% of your debt can also request a creditors meeting to discuss your proposal within 45 days of filing the proposal..

Once your creditors have accepted your proposal, the OSB, or any interested party, has 15 days to ask your LIT (us) to apply to the Court to have the proposal approved. The proposal is deemed approved by the Court at the expiry of 15 days if no request is made.

How Does a Consumer Proposal Affect My Mortgage?

Filing for a consumer proposal does not affect the terms of your mortgage. If you need to renew your mortgage while in the middle of a consumer proposal with your present lender, it should not be a problem if you have been making your mortgage payments on time. If you decide to change your mortgage lender despite being bound by a consumer proposal contract, the approval of your application is not guaranteed. This doesn’t mean you will be denied a mortgage, but the lender may have certain requirements such as a higher interest rate.

How Does a Consumer Proposal Affect My Credit Score?

Filing for a consumer proposal will give you an R7 credit rating, which means you have made a settlement with your creditors. Your credit report will also note that you filed a consumer proposal for 36 months after the date of final proposal payment.

Crowe MacKay & Company’s Licensed Insolvency Trustees share how to understand your credit rating, the impacts of a consumer proposal on your credit, and how to rebuild it.

What Happens After I Pay Off My Debts?

Once the terms of your proposal are fulfilled, you will be issued a Certificate of Full Performance and legally be released from the debts included in your consumer proposal.


Insolvency in Canada: Trends and Solutions

Insolvency in Canada: Trends and Solutions

Is Opting for a Consumer Proposal Worth It?

Is Opting for a Consumer Proposal Worth It?

What are the Alternative Debt Solutions?

What are the Alternative Debt Solutions?

How Does Bankruptcy or a Consumer Proposal Affect Student Loans?

How Does Bankruptcy or a Consumer Proposal Affect Student Loans?

Contact Our Trusted Licensed Insolvency Trustees

If you’d like to connect with one of our Licensed Insolvency Trustees in Vancouver or Surrey, call (604) 689 3928, email, or fill in the form below.

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