If you cannot repay all of your debt, owe less than $250,000 and do not wish to file for bankruptcy a consumer proposal can be considered.

When you file a consumer proposal you are using the Bankruptcy and Insolvency Act and the assistance of a Trustee to make a new deal with your creditors.

The Trustee, or in this case the Administrator, will assess your financial situation to determine what the creditors would get IF you declared bankruptcy. Then based on this amount the Administrator will suggest a total offer and the terms of repayment (the proposal) to the creditors.

The creditors can accept or reject your proposal but if the proposal is fair and generates a greater return than a bankruptcy, the acceptance rate is very high.
The amount and terms of the proposal will be determined by you and your adviser but depending on the circumstances debts can be settled as low as 1/3 - 1/2 of the total amount you owe.

Once the proposal is accepted you only need to meet the terms, attend your two counselling sessions and when the last dollar of the proposal is paid the balance of your debt will be eliminated or discharged by the application of the Bankruptcy Act.


A Consumer Proposal has all the benefits of bankruptcy like stopping further collection actions and garnishments.

The terms of a proposal can be set to match your unique situation. A schedule of monthly payments can be set that fits changes in your income or expenses.

Once your proposal is accepted you know exactly what and when you have to pay. In bankruptcies, where you pay based on your income you do not know how much it will cost until the end of the bankruptcy.

You can start rebuilding your credit during your proposal. Once you have stabilized your finances by filing your proposal start saving to help fix your credit. Once you have saved enough you can get a secured credit card and start rebuilding while you complete your proposal. When your proposal is over you will already have re-established yourself with one or two creditors.

You never have to say you went bankrupt on a future employment application or credit application.

You keep and maintain all of your property.

A consumer proposal does not have the same impact on your credit record as a bankruptcy R7 vs R9 and you do not lose any tax refunds or GST/HST credits, and it is very unlikely you will ever have to appear in court.

Since it is an application under the Bankruptcy Act most of the rules in relation to filing a bankruptcy apply so review the bankruptcy page .