Consumer proposal Canada
Consumer proposals are one of the best ways to deal with debt in Canada. If you can’t afford your repayments, our Licensed Insolvency Trustees can help you get back on track.
Safe, secure & confidential
What is a consumer proposal?
A consumer proposal is a formal, legally binding debt relief solution that lets you settle what you owe for less, without going bankrupt. It’s available to Canadians who owe up to $250,000 in unsecured debt (excluding your mortgage), and it must be filed by a Licensed Insolvency Trustee (LIT).
When you file a consumer proposal, your trustee works with you to offer your creditors a percentage of what you owe, spread over a period of up to five years. Once the proposal is accepted, you make fixed monthly payments, and any interest on your debts stops immediately. Creditors can’t take you to court, garnish your wages, or call you for payment.
You’ll still keep your assets—including your home, car, and tax refunds—as long as you stay current on any secured debts tied to those assets.
What are some consumer proposal pros and cons?
A consumer proposal is often the best middle ground between full repayment and bankruptcy, but it’s not always the best choice for everyone. A quick consultation with a Licensed Insolvency Trustee can help you weigh your options. Take a look below at some of the main pros and cons of a consumer proposal.
Consumer proposal pros
- Write off up to 80% of your unsecured debt
- Legally stops interest, collections, and wage garnishments
- Keep your home, car, and other assets
- One fixed monthly payment, up to 5 years
- No bankruptcy which means less impact on your credit (R7 vs R9)
- Filed by a Licensed Insolvency Trustee with no upfront fees
Consumer proposal cons
- Stays on your credit report for 3 years after completion or 6 years after filing—whichever comes first
- Must stick to payment schedule—3 missed payments can void the proposal
- Not all debts are included (e.g., secured loans, student loans under 7 years, child support)
- Creditors can reject the proposal if it’s too low
How much does a consumer proposal cost?
The cost of a consumer proposal depends entirely on how much you owe, your ability to repay, and what your creditors are likely to accept. You don’t pay upfront fees. Instead, your Licensed Insolvency Trustee includes their fee in your monthly payments, which are usually spread over a period of up to 60 months.
Here’s what determines the cost of a consumer proposal:
- Total unsecured debt (e.g. credit cards, payday loans, lines of credit, tax debt)
- Your income and budget (how much you can reasonably afford to repay)
- Value of your assets (in some cases, if creditors would get more in bankruptcy, they may expect a higher offer)
Your monthly payment covers the amount you’re offering to creditors, your trustee’s government-regulated fees, and any legal filing or administration costs. And because interest stops the moment the proposal is filed, you’re protected from your debt growing while you repay it.
See how much you could save with a consumer proposal
Your Potential Debts:
Your monthly repayments over a 60-month period would be
Before Consumer Proposal
$1409
After Consumer Proposal
$210
Monthly payments are determined based on individual financial factors
How Much Could I Save?What debts are included in a consumer proposal?
A consumer proposal can help you reduce and consolidate most unsecured debts (debts not tied to an asset like your home or car). Once your proposal is filed, interest on these debts stops, and creditors can no longer pursue legal action or collections.
Debts you can include in a consumer proposal
- Credit cards
- Lines of credit
- Personal loans
- Payday loans
- Tax debt (including CRA income tax, GST/HST, and overpaid benefits)
- Student loans (if it’s been more than 7 years since you left school)
- Bank overdrafts
- Unsecured bank loans
- Old utility bills
These debts are bundled into one affordable monthly payment with a set end date—giving you control and a clear path forward.
Debts you cannot include in a consumer proposal
- Secured debts (like your mortgage or car loan)
- Court fines or penalties
- Child support and spousal support
- Student loans under 7 years old
- Debts due to fraud or misrepresentation
If you’re unsure whether your debts qualify, a Licensed Insolvency Trustee can walk you through each one and help you understand your options.
How to file a consumer proposal in Canada
1. Meet with a Licensed Insolvency Trustee
You’ll start with a free consultation where the trustee reviews your debts, income, and assets. If a consumer proposal is right for you, they’ll help prepare the offer.
2. File your proposal
Your trustee files the proposal with the government. As soon as it’s filed, all collection calls, interest charges, and legal actions stop—this is called a stay of proceedings.
3. Creditor review and approval
Creditors have 45 days to vote on your offer. If the majority (by dollar amount) accept, the proposal becomes legally binding on all included creditors.
4. Make monthly payments and get debt relief
You’ll make fixed monthly payments for up to 5 years. Once complete, you receive a certificate of completion and a clean financial slate.
File a consumer proposal with Harris & Partners
We’ll start with a confidential chat to understand your debt situation. We’ll go over what you owe, your monthly income, and any assets you have. There’s no pressure or judgment, this will simply give you a clear look at your options.
Once we understand your finances, and if it’s the right choice for you, we’ll build a consumer proposal that works for your situation. We’ll look at what your creditors are likely to accept and what you can realistically afford.
When you’re happy with the plan, we’ll file it and handle all communication with your creditors. From there, you’ll make one fixed payment every month until the debt is paid.
What happens when you file a consumer proposal?
Filing a consumer proposal triggers immediate legal protection and sets you on a structured path to becoming debt-free.
- Collection action stops, so no more calls, wage garnishments, or legal threats.
- Interest is frozen on your unsecured debts.
- Creditors vote and have 45 days to accept or reject your offer.
- You make a fixed monthly payment for up to 5 years.
- Your credit report updates with an R7 rating, which drops off 3 years after completion or
- 6 after default—whichever comes first.
Why Harris & Partners
Our Licensed Insolvency Trustees provide a customized service that could remove up to 80% of your debt and stress, so you can breathe easier.
Our multilingual team provides support in many languages, from Farsi and Portuguese to Italian and Tamil, leaving out complicated jargon, so you understand everything, every step of the way.
Want to speak to someone in person? Our team is on hand to help at a Harris & Partners office near you.
Consumer Proposal FAQs
Who can file a consumer proposal?
To file a consumer proposal in Canada, you must meet the following criteria:
- Be an individual (not a business)
- Owe between $1,000 and $250,000 in unsecured debt (excluding your mortgage)
- Be insolvent, meaning you can’t afford to pay your debts as they come due
- Be either a Canadian resident or have assets in Canada
You must also work with a Licensed Insolvency Trustee (LIT), as they’re the only professionals legally allowed to file a consumer proposal on your behalf.
Even if you’re employed or own a home, you can still qualify. A quick consultation with an LIT can confirm your eligibility and whether a proposal is your best option.
What is the catch of a consumer proposal?
There’s no hidden “catch,” but it’s important to understand the full picture:
- It impacts your credit (R7 rating stays for 3 years after completion or 6 years after default, whichever comes first)
- If you miss 3 payments, the proposal can be annulled
- Not all debts are included, such as secured loans, recent student loans, or support payments
That said, for many Canadians, the benefits—debt reduction, legal protection, and asset retention—far outweigh the downsides.
What are the key features of a consumer proposal?
The key features of a consumer proposal include:
- Legally stops collection calls, wage garnishments, and interest
- Reduces your total unsecured debt—often by 60–80%
- One affordable monthly payment, fixed for up to 5 years
- You keep your home, vehicle, and other assets
- No bankruptcy on your credit record (a consumer proposal is listed as an R7, not an R9)
Will my credit score go up after a consumer proposal in Canada?
Your credit score may initially drop when you file a consumer proposal, as it’s reported as an R7 rating. However, once you complete the proposal and begin rebuilding your credit, many people see a steady increase in their score over time. You can start improving your credit even while making payments by using secured credit products and staying current on bills.
Can a consumer proposal be rejected?
A consumer proposal can be rejected by a creditor, but that doesn’t mean you are out of options or alternatives.
After you file a consumer proposal, creditors have 45 days to vet and vote on your proposal. In that time, they can: reject the proposal, reject the terms of the proposal and ask for a creditors meeting, accept the proposal or do nothing.
Votes are counted only if a creditors meeting is requested. If creditors then vote to reject your proposal by a majority, you have the following options:
- Renegotiate the terms of your proposal
- Withdraw your proposal and file for bankruptcy
- Pursue a different type of debt relief solution
- File for a new proposal at a future date
Our Licensed Insolvency Trustees - here to help with consumer proposals
With our Licensed Insolvency Trustees, you will never have to face the stress of debt alone. We are backed by decades of experience and are ready to help you find a way to financial security.
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![Jay harris]( "Jay-150×150-1.png")
Jay T. HarrisFCPA, CIRP, LITLicensed Insolvency Trustee -
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Kyle HarrisLL.B., CIRP, LITLicensed Insolvency Trustee -
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Adam FisherCPA, CIRP, LITLicensed Insolvency Trustee -
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Joshua HarrisBCOMM., MIB, CIRP, LITLicensed Insolvency Trustee -
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David AdamsLicensed Insolvency Trustee -
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Doug LoiselleLicensed Insolvency Trustee -
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Robert McLernonBComm, CIRP, LITLicensed Insolvency Trustee -
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Shelley KoehliLicensed Insolvency Trustee -
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Jill StruebyLicensed Insolvency Trustee
Where you can find our consumer proposal services in Canada
We operate across all provinces in Canada except Quebec, so help is always available at a Harris & Partners office near you.
File a debt consumer proposal with Harris & Partners
Harris & Partners Inc. is a licensed trustee insolvency (LIT) providing specialist debt relief options to help you manage your financial troubles. Whether you’re ready to file a consumer proposal, or want to explore other options like debt consolidation or bankruptcy, we’re here to support you.
Our range of debt help solutions in Canada is available across Canada. We are determined to use our expertise to help you live debt-free. Get in touch with a member of our team today!
It's never too late to obtain debt help. Book your free consultation today
- Phone number
- 800-268-8093
- hello@harrispartners.ca
