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What is a Consumer Proposal?
Discover what a Consumer Proposal is in Canada, and how it may help you with your debt situation.
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What is a Consumer Proposal?
A consumer proposal is an alternative to filing a bankruptcy. It is a negotiated debt settlement with all your creditors, with the help of a Licensed Insolvency LIT/Administrator. The magic of a consumer proposal is that once approved, it is binding on all your creditors, even if some of them don’t agree. And, as soon as you start the process, there is a legal Stay of Proceedings that gives you immediate legal protection from your creditors or collection agencies and all interest charges immediately stop.
A consumer proposal can result in savings of as much as 70-80% however, the consumer proposal’s cost is based on your personal situation.
A successful Consumer Proposal lets you keep control of your assets once your creditors agree to your proposal. This federally licensed program allows you to pay back only a small portion or what is owed and immediately stops all interest charges. The program allows you to develop an affordable creditor repayment plan that is binding on all creditors – including the CRA.
Canadian Consumer Proposal Explanation
Benefits of a Consumer Proposal
- One low affordable monthly payment – payment will never increase
- You are only repaying a portion of your debt
- You can maintain control over your personal assets – home, vehicle, investments etc.
- Interest on your debt stops – credit cards, Tax debts,
- All creditors are legally bound to the proposal terms once it has been accepted by a simple majority of your creditors.
A consumer proposal will:
- Immediately stops the interest
- Binding on all creditors when approved even if some vote against it,
- Creates one affordable monthly payment based on what you can afford
- Reduces or compromises the face amount (principle) of the debt.
If going further into debt by getting a consolidation loan would mean more debt that you can’t afford, talk to us today about a Consumer Proposal as this may be the right option for you.
Is a Consumer Proposal right for You?
If you are struggling to pay off your debts and keep current with family expenses, a consumer proposal may be right for you.
Under a Consumer Proposal you make an offer, or a proposal, to your creditors based on one fixed monthly payment you can afford. This offer is made to your creditors with the assistance of a Licensed Insolvency LIT/Administrator like C. E. Craig & Associates Inc.
Our debt elimination team will work as a mediator between you and your creditors – to help negotiate the best deal possible for all parties.
A consumer proposal is not the right choice for everyone. But it may be the right choice for you. You owe it to yourself to take advantage of this fully legal and responsible solution.
What similarities are there between a Bankruptcy and a Consumer Proposal?
Both a Bankruptcy and a Consumer Proposal:
- Are governed by the Bankruptcy and Insolvency Act (BIA) in Canada and must be implemented with the assistance of a Licensed Insolvency Trustee who will act as an Administrator under the proposal or Trustee in the bankruptcy.
- Take advantage of the Stay of Proceedings under the BIA – this means that all collection and garnishments cease upon filing.
- Result in interest charges no longer being incurred (does not apply to secured loans or non-dischargeable debts)
- Requires you to make full disclosure to your LIT of you family income and expenses, and the value of assets you own, as of the date of filing.
- Does not affect the rights of secured creditors.
- Automatically includes All creditors anywhere in the world – there is no “picking and choosing.”
- Are Legally binding on all creditors.
- Require each debtor to attend two counselling sessions.
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Consumer Proposal Resources & Information
Read the latest guides, insights, and resources prepared by our team to help you have peace of mind with your consumer proposal.
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- Consumer Proposal
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- Financial Literacy
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- Personal Bankruptcy
How Do Insolvency Trustees Get Paid in Canada?
By Colleen Craig, CPA, CA, FCIRP • March 25, 2026If you’re considering a bankruptcy or consumer proposal, one of the most common and important questions is: How do Licensed Insolvency Trustees get paid? Many people worry about hidden fees -
- Consumer Proposal
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- Financial Literacy
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- Personal Bankruptcy
Student Loans in British Columbia: Repayment Relief, Consumer Proposals, and Bankruptcy Options
By Colleen Craig, CPA, CA, FCIRP • January 29, 2026Student loan debt is one of the most common financial pressures we see in our British Columbia insolvency practice, particularly when combined with credit cards, lines of credit, or tax -
- Consumer Proposal
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- Financial Literacy
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- Personal Bankruptcy
13 Strategies for Living Debt Free on One Income in 2025
By Colleen Craig, CPA, CA, FCIRP • July 16, 2025In today’s economic climate with rising interest rates, inflation pressures, and unpredictable expenses. Living debt-free may feel like an impossible dream. But with discipline, planning, and a few smart habits,
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There can be many solutions to debt problems and every person’s story is unique. At C.E. Craig & Associates Inc. we take the time to listen to you – to help find the best option for you. Every journey begins with one single step.