8 min

Debt

Thinking about a consumer proposal? Start here.

Quick summary

A consumer proposal is a legal offer, filed through a licensed insolvency trustee, to pay creditors part of what you owe, over more time, or both, for up to five years. Your total debts must be $250,000 or less, not counting a mortgage on your main home. We take no money from trustees. Read ourcomparison with bankruptcy.

Checked November 3, 2026. Main source: Office of the Superintendent of Bankruptcy: Consumer proposals. See all 2 sources.

Key facts

Who can file: Total debts of $250,000 or less, not counting a mortgage on your main home; Source: OSB, Consumer proposals, read Nov 3, 2026
Longest term: 5 years; Source: OSB, Consumer proposals, read Nov 3, 2026
Equifax: Removes a proposal 3 years after completion; Source: OSB, Compare debt solutions (modified Nov 26, 2025)
TransUnion: Removes it 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 the proposal is deemed annulled; Source: OSB, Consumer proposals, read Nov 3, 2026

Where are you right now?

Debt can feel heavy. A consumer proposal is one legal option, not the only one. Pick the line that fits you.

I am worried and researching

Start with proposal vs bankruptcy

Someone told me to consider one

Is it worth it?

I am in a proposal now

What happens if payments are missed

I finished my proposal

Rebuild your credit

Your first small step

Write down every debt you owe, who it is owed to, and the amount. A trustee asks for this list first.

How a consumer proposal works

Who can file: people whose total debts are $250,000 or less, not counting a mortgage on the main home.
How long: the term cannot be longer than five years.
Who files: a licensed insolvency trustee files it with the Office of the Superintendent of Bankruptcy.
Once it is filed: you stop paying unsecured creditors directly, and wage garnishments and lawsuits against you stop.
Creditors have 45 days to accept or reject it. A creditor meeting is held if creditors owed at least 25% of the total claims ask for one.
After acceptance, the Superintendent or another interested party has 15 days to ask for a court review.
You must attend two counselling sessions.
If you miss three monthly payments, the proposal is deemed annulled.
When you meet the terms, you receive a certificate of full performance.

What it does to your credit report, and for how long

The trustee reports the filing to Equifax and TransUnion. The sources word the end date a little differently, so check with each bureau.

The Office of the Superintendent of Bankruptcy says Equifax removes a proposal 3 years after completion, and TransUnion removes it at the earlier of 3 years after completion or 6 years after signing. Our other guide cites Equifax and the Financial Consumer Agency of Canada for 3 years after you finish or 6 years after you sign, whichever comes first.

We do not give a score number, because it depends on your whole file.

Debt management plan, consumer proposal or bankruptcy

Debt management plan, consumer proposal or bankruptcy
Question	Debt management plan	Consumer proposal	Bankruptcy
How long	1 to 5 years	Up to 5 years	First bankruptcy: 9 months without surplus income payments, 21 months with them. Second: 24 or 36 months. Third or more: set by the court.
Fees	Not regulated. They vary, so ask upfront.	Regulated by the Bankruptcy and Insolvency Act. A trustee may offer a free first meeting.	Regulated by the same Act. A trustee may offer a free first meeting.
Collection actions	Creditors who agree stop, including lawsuits and wage garnishments.	Creditors are legally required to stop.	Creditors are legally required to stop.
Credit report	Shows a payment arrangement for 2 years after completion.	Equifax: 3 years after completion. TransUnion: earlier of 3 years after completion or 6 years after signing.	First bankruptcy: 6 or 7 years after discharge, depending on province. Later: 14 years.
Assets	Not addressed by the source.	Not specifically addressed. You must make the payments in the proposal.	Exempt assets can be kept. Others go to the trustee. Exemptions vary by province.

This is general information, not legal advice. A licensed insolvency trustee can explain which option fits you.

What to bring to a first meeting

A list of debts with the creditor, balance and monthly payment.
Your income and monthly expenses.
Recent bank statements and pay stubs.
A list of what you own, such as a home, car, savings and RRSP.
Any letters from collectors or lawsuit papers.
Your questions: What would my monthly payment be? What is the total cost with fees? How long will it take? What happens to my car or home? Will you explain the other options?

All our consumer proposal guides

We take no money from trustees

We do not take trustee payments or referral fees, and there are no debt settlement or payday loan ads on this page. If that ever changes, we will say so at the top. See how we check our numbers and how we make money.

Debt and collections: guides

See all 25 debt and collections guides

Questions people ask

Who can file a consumer proposal?

People whose total debts are $250,000 or less, not counting a mortgage on their main home, according to the Office of the Superintendent of Bankruptcy.

How long can a consumer proposal last?

Up to five years.

Do collection calls and lawsuits stop?

Once a proposal is filed, wage garnishments and lawsuits against you stop, and you stop paying unsecured creditors directly.

What if I miss payments?

If you miss three monthly payments, the proposal is deemed annulled.

Is the first meeting with a trustee free?

Licensed insolvency trustees may offer a free first consultation. Ask when you book.

Does your province have its own rules?

Who licenses collectors, how much of your pay can be taken and which agencies can help are set by each province. Pick yours to see where to look. We remember your choice on this device only.

Province or territory