Benefit of a Consumer Proposal

Consumer Proposal – Can it help You?

Consumer proposals have become a very popular method for reducing debt in Canada. Most recently, in Surrey BC, over 2700 consumers proposals were successfully filed. This is a sharp contrast to 2010 where 1662 proposals were filed by consumers in Surrey. It is clear that the increase in popularity is due to the effectiveness of the program.

Consumer proposals offer an effective solution to reducing debt and getting people back on financial track.

Here is a typical sample: Betty owes $45,000.00 on her credit cards, line of credit, CRA, and payday loans.  Betty has a pretty good job but she can not get caught up on her bills and lives pay check to pay check.  The interest accumulates every month and she is barely making a dent in her past due balances.  Betty files a consumer proposal, with a bankruptcy trustee and agrees to pay $300.00 for the next 4 years to all her creditors.  The creditors review and vote to accept her proposal, she pays the $14,400.00 and in 4 years is debt free.

Advantages to a Consumer Proposal

  • Reduces your debt level by up to 80%

If you have $35000 in credit card debt it could be reduced to $7000.00

  • Protects your assets

You will keep your home, car, RRSP, pensions & furniture

  • End interest charges

Freezes interest, late payment and penalty charges immediately

  • Single, affordable payment on your terms

Pay only what you can afford, when you can afford it, monthly payments or lump sum payment

  • Protection from Canada Revenue Agency and creditors

Ends harassing debt collection calls

  • Credit score is less affected

Bankruptcy remains for 7 years after discharge, consumer proposals remain for 3 years

Disadvantages of Consumer Proposal

  • Pay more than bankruptcy

Filing bankruptcy will cost you less, paying just pennies on the dollar

  • Creditors can turn down the proposal

Majority of creditors must vote and approve your proposal

  • Regular or stable income required

Must prove sufficient income to complete proposal


Each persons situation is unique, talking to a licensed trustee to determine if a consumer proposal is right for you is the first step.

Bankruptcy trustees and consumer proposal administrators in Surrey are ready to provide a free debt assessment.

Find out if you qualify