2026-06-08
How to protect yourself from debt collectors, know your rights, and explore your options
What is a Consumer Proposal?
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A consumer proposal is an offer to pay creditors a percentage of what is owed to them, or to extend the time you have to pay off your debts, or both. The consumer proposal is a legally binding, formal agreement negotiated between you and your creditors and administered by a Licensed Insolvency Trustee.
How do I Qualify for a Consumer Proposal?
A consumer proposal could be worth considering if you need more time to pay back your debts. You are eligible if you owe less than $250,000 (not including your mortgage) and cannot pay your debts in full, even though you have a steady income.
What is the Process for a Consumer Proposal?
Step 1: Meet a with a Licensed Insolvency Trustee
Together, you will evaluate your financial situation to determine if a consumer proposal is an appropriate debt relief solution. If you decide it is, your Trustee will then review the process with you in detail.
Step 2: Prepare and file the proposal
Your local MNP LTD Licensed Insolvency Trustee will help you decide the monthly amount to pay your creditors. As soon as the proposal is filed, any legal action, wage garnishment or collection calls will stop.
Step 3: Fulfill the Agreement
If your proposal is accepted, you will then be required to pay the agreed upon amount within five years. You must also attend two credit counselling sessions.
Step 4: Become Debt-free
Once you have completed all your duties, will be released from all unsecured debts you owed on the day you filed. A consumer proposal will stay on your record for three years after your last payment.
Is a Consumer Proposal the Right Solution for You?
There are many benefits to a consumer proposal, especially if you want to avoid declaring bankruptcy. Interest on your debts stops accumulating, all wage garnishments and harassing phone calls from your creditors cease—and, unlike bankruptcy, you can keep certain assets like your home and car.
However, a consumer proposal will negatively impact your credit score, which may make it difficult to obtain any kind of credit for as long as the proposal remains on your credit report.
Want to know how to proceed? Connect with one of our local Licensed Insolvency Trustees to learn more about the consumer proposal process and decide if it's the right way to address your financial situation.
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