---
title: What is a consumer proposal
date: 2023-09-08T14:35:00-04:00
canonical_url: "https://grantthorntonlimited.ca/en/consumer-proposal/what-is-a-consumer-proposal"
section: Pages
---
# What is a **consumer proposal?**

A consumer proposal is a popular alternative to [bankruptcy](https://grantthorntonlimited.ca/en/bankruptcy/what-is-bankruptcy). It’s a legally binding agreement between you and your creditors that helps reduce [unsecured debt](https://grantthorntonlimited.ca/en/debt-help-resources/articles/whats-the-difference-between-secured-and-unsecured-debt), including credit cards, income tax debt, and payday loans.

A Licensed Insolvency Trustee (LIT) works with you to propose an affordable repayment plan to your creditors. If accepted, this debt relief option lets you repay a portion of what you owe in exchange for debt forgiveness.

 

 

  ![A smiling young male exploring debt relief solutions on his smartphone.](https://pr-assets.grantthorntonlimited.ca/craftcmsimages/Content-block-imagery-and-graphics/_imageLarge/men-looking-at-phone.png)  

 

 

 

##  **The advantages** of a consumer proposal

A consumer proposal offers several advantages over other debt solutions, including bankruptcy and debt settlement—**beyond reducing your debt by up to 80%.**

 

 

- Interest-free monthly payments that **fit your budget**.
- **Monthly or lump sum payments** options (with some exceptions).
- Once filed, **collection actions and wage garnishments stop.**
- You'll likely **keep your assets**, including your car, home, and RRSPs.
- **Less impact on your credit score** (R7) for a shorter time than bankruptcy.
 
 

 

 

 

 

 

##  **Do I qualify** for a consumer proposal?

As a federally regulated debt solution, you must meet the following requirements:

- **You must reside in Canada** or own assets in Canada.
- You must be insolvent**—which means that you can't meet your financial obligations as they come due—or your debts exceed the value of your assets.
- You must have **less than $250,000 in unsecured debt** (excluding your mortgage).
 
 

Only a Licensed Insolvency Trustee can administer a consumer proposal in Canada. Talk to one of our LITs or debt solutions professionals to see if a consumer proposal is right for you.

 [ Book a free consultation ](https://grantthorntonlimited.ca/en/get-in-touch/contact-us) 

 

 

  ![Mean appearing on the screen of a laptop screen explaining the benefits of filing a consumer proposal](https://pr-assets.grantthorntonlimited.ca/craftcmsimages/Additional-imagery/_imageLarge/women-virtual-meeting.png)  

 

 

 

 

## **How do I file** a consumer proposal?

Your proposal is filed when the majority of your creditors agree to its terms. While consumer proposals generally have a high acceptance rate, every situation is unique and your experience may vary slightly from the below steps.

 

1. 1 [Meet with a debt solutions professional](#block-4104)
2. 2 [We'll prepare your proposal](#block-4120)
3. 3 [Review and sign your proposal with your LIT](#block-4153)
4. 4 [Your creditors vote on your consumer proposal](#block-4176)
5. 5 [Complete your debt payments and other responsibilities](#block-4196)
6. 6 [Begin your financial fresh start](#block-4220)
 
 

 

 

  ![Two speech bubbles, one yellow and one white, representing a conversation.](https://pr-assets.grantthorntonlimited.ca/craftcmsimages/Additional-imagery/_imageLarge/communication.svg)  

 

 Step 1##  Meet with a **debt solutions professional**

During your consultation, we assess your financial situation and recommend the best option to address your debt. If a consumer proposal is right for you, we review your income and expenses to estimate an affordable monthly payment. Your first appointment is always free, confidential, and judgment-free.

 

 

 

 

 

  ![A yellow file folder with documents within](https://pr-assets.grantthorntonlimited.ca/craftcmsimages/Additional-imagery/_imageLarge/file.svg)  

 

 Step 2##  **We prepare** your proposal

Next, we prepare the documents needed to submit your consumer proposal to your creditors, and you review everything before we file it. At this stage, we may ask for additional information to confirm your debts, income, and creditor details.

 

 

 

 

 

  ![Hand holding a purple pen](https://pr-assets.grantthorntonlimited.ca/craftcmsimages/Additional-imagery/_imageLarge/pen-in-hand.svg)  

 

 Step 3##  **Review and sign your proposal with your LIT

After you’ve reviewed and signed your consumer proposal, your trustee will file it with the Office of the Superintendent of Bankruptcy (OSB). Once filed, you’ll no longer pay your creditors directly, collection calls will stop, and your creditors can’t garnish your wages or take legal action against you for your debt.

 

 

 

 

 

  ![Yellow envelope with letter inside](https://pr-assets.grantthorntonlimited.ca/craftcmsimages/Additional-imagery/_imageLarge/mail-graphic.svg)  

 

 Step 4##  Your creditors **vote on your consumer proposal**

Creditors have 45 days from the filing date to vote on your proposal. For approval, the majority of your creditors must accept the terms. Typically, proposals are accepted, as you’ll repay more of what’s owed to creditors—compared to bankruptcy.

If your creditors reject the proposal, your LIT may renegotiate the terms. If it’s rejected again, we’ll help you explore other debt relief options.

 

 

 

 

 

  ![Two hands shaking in agreement. One arm yellow, the other purple](https://pr-assets.grantthorntonlimited.ca/craftcmsimages/Additional-imagery/_imageLarge/hands-shaking.svg)  

 

 Step 5##  Complete your **debt payments and other responsibilities**

Once your proposal is signed, you’ll begin making either monthly or lump-sum payments to your trustee—who will pay your creditors on your behalf. You’ll have up to five years to complete your payments, but you can pay off the balance early if you’re able.   
  
You’ll also be required to attend two financial counselling sessions and meet any other conditions outlined in your proposal.

 

 

 

 

 

  ![A purple sprout coming out of the ground, symbolizing a fresh start](https://pr-assets.grantthorntonlimited.ca/craftcmsimages/Additional-imagery/_imageLarge/fresh-start.svg)  

 

 Step 6##  Begin your **financial fresh start**

After you’ve fulfilled the terms of your consumer proposal, you’ll receive a Certificate of Full Performance. This marks the official end of your proposal and the beginning of your financial fresh start. You can now focus on rebuilding your credit and living debt-free.

 

 

 

 

 

 Debt help tool##  Explore your **debt repayment options**

Every person's debt situation is different. Our debt repayment calculator can help you understand your debt management options and estimated monthly payments.

 [ Try our debt calculator ](https://grantthorntonlimited.ca/en/debt-help-resources/debt-repayment-calculator) 

 

 

  ![White calculator on a light purple background](https://pr-assets.grantthorntonlimited.ca/craftcmsimages/Content-block-imagery-and-graphics/_imageLarge/calculator-white.png)  

 

 

 

 

## The basics of a consumer proposal

###   **What’s a consumer proposal?**  

A consumer proposal is a legal repayment agreement negotiated with your creditors to settle [unsecured debts](https://grantthorntonlimited.ca/en/debt-help-resources/articles/whats-the-difference-between-secured-and-unsecured-debt) such as [credit cards,](https://grantthorntonlimited.ca/en/debt-help-resources/articles/options-for-getting-out-of-credit-card-debt) [income tax](https://grantthorntonlimited.ca/en/debt-help-resources/articles/income-tax-debt-relief), and [payday loans](https://grantthorntonlimited.ca/en/debt-help-resources/articles/how-to-get-out-of-payday-loan-debt). In Canada, consumer proposals can only be administered by a Licensed Insolvency Trustee, who will work with you to offer creditors a percentage of what’s owed and/or adjust repayment terms based on what you can afford.

 

 

 

###   **How long does a consumer proposal last?**  

A consumer proposal is paid over a maximum of five years. If you’re able to, you can make larger, lump sum, or more frequent payments to finish the proposal faster.

 

 

 

###   **Does a consumer proposal affect my spouse and children?**  

As long as you don’t have joint debt, your family won’t be affected by your consumer proposal. If your spouse has co-signed or endorsed your debt, they’ll be equally responsible or solely responsible for maintaining payments after you file.

Children aren’t affected by a proposal, and you’ll continue to receive child benefit payments (if applicable). RESPs, however, aren’t a [protected asset](https://grantthorntonlimited.ca/en/debt-help-resources/articles/article-what-assets-can-i-keep-in-bankruptcy) in some provinces, and can be seized to pay down your debt.

 

 

 

###   **Will a consumer proposal stop debt collectors and collection calls?**  

Yes, once you file your consumer proposal, all collection efforts on included debt stop. When you file, a “stay of proceedings” is issued, which legally prevents debt collectors from continuing any [collection activity](https://grantthorntonlimited.ca/en/debt-help-resources/articles/stop-collection-calls-for-good)—including [wage garnishment](https://grantthorntonlimited.ca/en/debt-help-resources/articles/wage-garnishment-how-it-works-and-what-you-can-do).

It may take creditors six to eight weeks to stop collection attempts, but your trustee will handle communication with them on your behalf. If a creditor continues to contact you, let your trustee know, and they’ll follow up directly.

 

 

 

 

 

 

##  Debt happens ****more than you think**** 

We've helped thousands of Canadians take control of their finances and live happier, debt-free lives.

 

 

 ### They allowed me to let go of the shame and embarrassment.

After losing my entire retirement savings in a cryptocurrency scam, I was devastated both financially and emotionally. Their calm, non-judgmental explanations and guidance allowed me to let go of the shame and embarrassment. I can now see not just the dark and awful tunnel, but the light at the end.

 

 — Kathyrn L. (Victoria, BC)

 

 

 

### I finally feel like I am getting control of my life and my finances.

I was feeling very stressed when I finally decided to call for help. From the very first phone call, I felt supported and understood. They have been exceptional, guiding me and giving great advice. I finally feel like I am getting control of my life and my finances. I am so very appreciative for their help at Doane Grant Thornton!!

 

 — Joanna M. (St. John's, NL)

 

 

 

### They were professional, knowledgeable, patient, and respectful.

From the beginning, they were professional, knowledgeable, patient, and respectful. I truly appreciate the support, understanding, and professionalism I received throughout the process. I would definitely recommend Doane Grant Thornton to anyone who is looking for professional and compassionate guidance during a difficult financial situation.

 

 — Mahan S. (Toronto, ON)

 

 

 

### They gave me hope when I was hopeless.

Doane Grant Thornton gave me hope when I was hopeless. Stuck in a revolving door of making payments that go nowhere. They explained to me what my options were in great detail and were so reassuring to me when I really needed it. We worked out a proposal that works for me and I feel like a weight has been lifted.

 

 — Alyson S. (Edmonton, AB)

 

 

 

 

 

  

 

## **Take the first step** to debt freedom

Speak to one of our debt solutions professionals during a free, no-obligation consultation.

 [ Book a free consultation ](https://grantthorntonlimited.ca/en/get-in-touch/contact-us) 

 

##  You can count on us!

LITs are the only federally regulated debt professionals qualified to offer solutions such as bankruptcies and consumer proposals. When you choose a LIT, you can be assured that you’re dealing with someone who‘s proven they have the knowledge, experience, and skills to help you make an informed decision about your finances.

- 50+ Years of experience
- 60+ Locations
- 100k+ Canadians helped
 
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 [ Learn more about us ](https://grantthorntonlimited.ca/en/about-us/who-we-are) 

 

 

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