Consumer Proposal: FAQ

Have questions about how consumer proposal work? Find answers to the most common questions.

Want to Skip the Info?

Let’s Talk!

We’ve got you covered:

Your Questions Are Important to Us

General faq

Why would I file a Consumer Proposal?

A consumer proposal allows you to reduce your debt by up to 80%, stop interest and collection calls, and keep your assets — all without filing for bankruptcy

How does a Consumer Proposal work?

A Licensed Insolvency Trustee negotiates with your creditors to settle your debt. You make one affordable, interest-free monthly payment over a fixed term (up to 5 years).

How much do I pay with a Consumer Proposal?

What you pay depends on your income, assets, and what creditors are likely to accept — but many people pay as little as 20% of what they originally owed.

Are there fees for a Consumer Proposal?

There are no extra or hidden fees. Your Licensed Insolvency Trustee’s costs are built into your monthly payments and are regulated by the government.

What is a basic example of a Consumer Proposal scenario?

If you owe $50,000 in unsecured debt, your proposal could reduce this to $10,000, payable as $167/month for 60 months — interest-free.

How do I file a Consumer Proposal?

You begin by meeting with a Licensed Insolvency Trustee. They’ll assess your financial situation and file your proposal with your creditors. Once accepted, payments begin.

What happens if a Consumer Proposal is rejected?

Your Trustee can renegotiate terms and resubmit the proposal. If it’s still not accepted, you may consider other debt relief options like bankruptcy.

When does a Consumer Proposal clear debt in Canada?

Once your proposal is completed — typically within 5 years or sooner if you pay it off early — your included debts are considered legally settled and cleared.

Assets & Benefits

What happens to your assets when you file a Consumer Proposal?

You keep your assets. Unlike bankruptcy, a consumer proposal doesn’t require you to surrender anything.

Can I keep my home when filing a Consumer Proposal?

Yes. As long as you keep up with mortgage payments, your home is protected in a consumer proposal.

How soon can I buy a house after filing a Consumer Proposal?

While everyone’s situation is different, many people begin rebuilding credit during the proposal and may qualify for a mortgage after completion or even during the proposal term.

Can I keep my car when filing a Consumer Proposal?

Yes. You can keep your vehicle as long as you continue making any required loan or lease payments.

Can I keep my personal possessions when filing a Consumer Proposal?

Yes. All personal belongings — like furniture, clothing, and household items — are unaffected by a consumer proposal.

How are my savings and investments affected by filing a Consumer Proposal?

Your existing assets (including savings and RRSPs) are generally protected. Future contributions can resume after your proposal begins.

How are my tax returns and government benefits affected by filing a Consumer Proposal?

You keep your tax refunds and government benefits unless you owe money to the CRA — which can be included in the proposal.

Advantages / Disadvantages

What are the advantages of a Consumer Proposal?

You reduce your total debt, avoid bankruptcy, keep your assets, freeze interest, and make one predictable monthly payment — with legal protection from creditors.

What is the difference between a Consumer Proposal and Bankruptcy?

Bankruptcy may require surrendering assets and surplus income payments. A consumer proposal lets you keep your assets and spread reduced payments over time.

What is the difference between a Consumer Proposal and Debt Consolidation?

Debt consolidation is a new loan (with interest); a consumer proposal is a negotiated debt reduction with no interest and legal protections.

Get all your questions answered

Have questions about how consumer proposal work? We’ve got clear answers to help you feel informed, supported, and confident in your next step.

Talk to an Expert

Find Out How Much You Can Save With a Consumer Proposal!

Try our easy-to-use calculator and learn how much a consumer proposal could cut down your debt.

Debt Calculator

Real Canadians. Real Success — Like Larissa

“I can’t thank Spergel enough for their support and expertise during one of the toughest times in my life. Their consumer proposal not only reduced my debt significantly but also stopped the constant stress of creditor calls. Now, I’m able to focus on providing a stable future for my children without worrying about money. And, I can now sleep at night! Spergel truly gave me a fresh start.”

– Larissa, Ontario

Read Larissa’s Story

Larissa’s Story is just one of many

It shows that once you face your debt and get the right help, life can get better – quickly. Discover more Success Stories of Canadians we’ve helped, or reach out to us.

Reach Out