Consumer Proposal Eligibility

To qualify for a Consumer Proposal in Canada, your total debts, excluding mortgages or loans on your primary residence, must not exceed $250,000. Additionally, any debts owed to the Canada Revenue Agency must not exceed $200,000 or represent more than 80% of that limit.

To determine your eligibility for a Consumer Proposal in Canada, compile a list of all your debts, including items like lines of credit, car loans, leases, income tax, personal loans, and credit cards. After creating this list, identify and exclude any mortgages or loans associated with your primary residence, and sum up the remaining debts. If, after deducting the mortgages or loans on your primary residence, the total debt exceeds $250,000, you do not meet the eligibility criteria for a Consumer Proposal.

What If My Debts Exceed $250,000?

  1. If your debts surpass $250,000, your next option is a Division I Proposal, which differs from a Consumer Proposal in two main ways:

  1. If you miss a payment in a Division I Proposal, you have 30 days to rectify the default, or 60 days from your last payment. In contrast, a Consumer Proposal allows you to miss up to three cumulative payments before it defaults. If your creditors vote against your proposal in a Division I Proposal, you are automatically declared bankrupt.

However, it's worth noting that the $250,000 Consumer Proposal threshold is becoming less significant from a creditor perspective. If you possess substantial income or significant assets you wish to retain, many creditors may not accept a Consumer Proposal and will automatically vote against it. In cases where debts and incomes are lower while assets are substantial, a Consumer Proposal may become less feasible.

We anticipate this trend will persist as creditors perceive Division I Proposals as a more substantial commitment from debtors compared to Consumer Proposals.

Choosing the Right Path

While the rules governing Consumer Proposals are straightforward, each situation is unique. It's crucial to consult with a licensed trustee in your area to explore the benefits of a Consumer Proposal and have your specific circumstances assessed. Our Licensed Insolvency Trustees possess extensive experience and insight into creditor perspectives, as well as effective strategies, so please don't hesitate to contact one of our Consumer Proposal Specialists.

Feel free to get in touch with us! We are eager to elucidate the mechanics of a consumer proposal and elucidate the advantages you can anticipate from consolidating your payments into one manageable monthly installment, devoid of the exorbitant interest rates you've encountered in the past.

Frequently Asked Questions

Empowering Your Financial Future, One Proposal at a Time

What is a Consumer Proposal?

A Consumer Proposal is a formal debt settlement arrangement regulated by the government of Canada. It allows individuals to negotiate with their creditors to repay a portion of their debt over a set period, usually up to five years, in a more manageable way.

Who is eligible for a Consumer Proposal?

Most unsecured debts, such as credit card debt and personal loans, can be included in a Consumer Proposal. To be eligible, you must have a stable source of income and owe less than $250,000 (excluding your mortgage) as of the date you file.

How does a Consumer Proposal affect my creditors?

When you file a Consumer Proposal, it legally binds all your unsecured creditors. They must stop all collection activities, including calls, letters, and legal actions. Creditors then have the opportunity to vote on whether to accept your proposal.

What are the advantages of a Consumer Proposal?

Some benefits of a Consumer Proposal include lower monthly payments, a fixed repayment schedule, and protection from legal actions by creditors. It also allows you to keep your assets and avoid the stigma of bankruptcy.

Are there any disadvantages to a Consumer Proposal?

While a Consumer Proposal offers several advantages, it will appear on your credit report for three years after you complete it. This can affect your ability to obtain credit during that time.

What Does the Trustee Do?

The insolvency or bankruptcy trustees job is to:

  • Explain your options

  • Give advice and information

  • Complete all documentation

  • Deal with creditor on your behalf

  • Guide and help you through the bankruptcy process

As well, bankrupts are required to complete two financial counselling sessions, directed by the trustee.

How is the amount to be paid in a Consumer Proposal determined?

The amount you offer to pay in your Consumer Proposal is based on your income, expenses, and the value of your assets. It should be an amount that you can reasonably afford.

Can I make changes to my Consumer Proposal once it's accepted?

It is possible to modify your Consumer Proposal under certain circumstances, but any changes must be approved by your creditors and the court.

Will my Consumer Proposal be accepted by creditors?

The acceptance of your Consumer Proposal depends on your creditors' votes. If the majority in dollar value of your creditors approve it, your proposal is considered accepted.

What happens if my Consumer Proposal is not accepted?

If your Consumer Proposal is not accepted, you have the option to revise and resubmit it. Alternatively, you may explore other debt relief options, such as bankruptcy.

How long does a Consumer Proposal stay on my credit report?

A Consumer Proposal will remain on your credit report for three years after you complete it. Afterward, it will be removed from your credit history. It's crucial to consult with a licensed insolvency trustee or financial advisor to determine if a Consumer Proposal is the right solution for your specific financial situation.

Client Voices: Our Success Stories and Testimonials

"At, Consumer Proposals Hub, we don't just help with your financial challenges; we care about your journey toward a debt-free future because your well-being matters to us."

Emily Wexler

When I was drowning in debt and feeling overwhelmed, their team stepped in and guided me through the entire consumer proposal process with professionalism and empathy. From the initial consultation to the final approval, they were with me every step of the way.

John & Mary Klim

We recently used Consumer Proposals Hub to help us navigate our financial difficulties through a consumer proposal. Overall, we had a positive experience with them. Their team was knowledgeable, and they did a great job explaining the entire process to us. They also helped negotiate with our creditors and create a proposal that we could afford.

Alex Gorshkovich

I can't thank Consumer Proposals Hub enough for the incredible support they provided during one of the toughest periods of my life. From the very first meeting, they made me feel at ease and assured me that they could help me find a way out of my debt nightmare.