Does a Consumer Proposal Affect My Job?

Worried about how filing a Consumer Proposal could impact your job? You’re not alone.

Many Canadians considering this debt relief option wonder if it may jeopardize their employment. The good news is that a Consumer Proposal is designed to help you manage your debt without putting your job at risk.

But there are a few things you should know, especially if your role involves a professional license or financial responsibilities. Let’s break it down.

What is a Consumer Proposal, and will it affect my job?

A Consumer Proposal is a federally regulated and legally binding process available to insolvent Canadians. This process provides for a reduction of debt owed to unsecured creditors, or an extension of time for repayment of the debt, or both.

Filing a Consumer Proposal won’t impact your job. According to Section 66.36 of the Bankruptcy and Insolvency Act, your employer can’t fire, suspend, lay you off, or take any disciplinary action against you just because you filed a Consumer Proposal.

However, if your job involves a license or is overseen by a governing body, you might need to let the governing body or licensing agency know if you file a Consumer Proposal. We often recommend contacting them before filing to find out if or how it may affect your employment.

If I change jobs, do I need to let them know?

It is important to note that while you can’t be laid off or terminated for filing a Consumer Proposal, it could come up when you’re job hunting.  

Many employers perform a credit check as part of their background screening, especially for roles that involving handling money, trust funds, or large amounts of cash. Depending on the employer, you might get a chance to explain why you filed the Consumer Proposal, and/or they may request a letter from your Licensed Insolvency Trustee (LIT) confirming the proposal is in good standing.

You’re not alone in this.

A Consumer Proposal may be your best option for dealing with your debt, and for most people, it will have no impact on their employment. However, it is always important to speak with your LIT or an advisor about your specific and individual circumstances so that they can give you the best advice on how filing a Consumer Proposal may affect you and your job.

Contact us for a free, confidential consultation to discuss your unique needs.