Is a consumer proposal worth it?
Quick summary
It can be, if you cannot repay your debts in full but can make steady payments. A consumer proposal stops garnishments and lawsuits, lets you keep your assets and lasts up to five years. The cost is a mark on your credit report, and missed payments can cancel it. Next step: compare it with bankruptcy and a debt management plan.
Checked November 2, 2026. Main source: Office of the Superintendent of Bankruptcy, Consumer proposals. Checked November 2, 2026.. See all 2 sources.
Key facts
- Longest term
- 5 years
- Source: OSB, Consumer proposals, read Nov 3, 2026
- What stops once it is filed
- Wage garnishments and lawsuits against you
- Source: OSB, Consumer proposals, read Nov 3, 2026
- Credit report
- Equifax removes it 3 years after completion; TransUnion at the earlier of 3 years after completion or 6 years after signing
- Source: OSB, Compare debt solutions (modified Nov 26, 2025)
- If you miss payments
- Three missed monthly payments and it is treated as cancelled
- Source: OSB, Consumer proposals, read Nov 3, 2026
What you get
- Wage garnishments and lawsuits against you stop once the proposal is filed.
- You pay one trustee instead of many creditors.
- You keep your assets, as long as you keep paying secured creditors.
- You repay a percentage of the debt, not all of it.
- The term cannot be longer than five years.
- When you finish, you are released from the debts in the proposal.
Source: Office of the Superintendent of Bankruptcy, Consumer proposals and Compare debt solutions. Checked November 2, 2026.
What it costs you
- Your credit report shows it. It comes off 3 years after you finish, or 6 years after you sign, whichever comes first.
- If you miss three monthly payments, the proposal is treated as cancelled and creditors can try to collect again.
- It only covers debts of $250,000 or less, not counting a mortgage on your main home.
- A Licensed Insolvency Trustee runs it, and their fees are part of the process. Ask for every fee in writing before you sign.
Source: Office of the Superintendent of Bankruptcy. Checked November 2, 2026.
When it may fit, and when something else may
A consumer proposal may fit if you cannot repay all your debt, you can make regular payments, and you want to keep your assets.
A debt management plan repays the full debt, sometimes without interest, through a credit counsellor. That may fit if you can repay everything given more time.
Bankruptcy may be worth discussing if you cannot make regular payments. A first bankruptcy lasts 9 or 21 months, but some assets can go to the trustee.
This is a general guide, not advice. A Licensed Insolvency Trustee can look at your numbers and explain all three options.
Questions to ask a trustee
- What is my total cost, including fees?
- What would my monthly payment be, and for how many months?
- What happens to my assets and my home?
- What happens if I miss a payment?
- How will this show on my Equifax and TransUnion reports?
- What are the other options for my situation?
Questions people ask
Is a consumer proposal worth it?
It can be if you cannot repay your debts in full but can make steady payments and want to keep your assets. A trustee can check if it fits your numbers.
Does a consumer proposal ruin your credit?
It shows on your credit report. It comes off 3 years after you finish, or 6 years after you sign, whichever comes first.
What happens if I miss payments?
If you miss three monthly payments, the proposal is treated as cancelled and creditors can try to collect again.
Do I keep my house and car?
You keep your assets as long as you keep making payments to secured creditors, such as your mortgage or car loan.
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