The Consumer Proposal Process, Step by Step

Most people considering a Consumer Proposal want to know one thing first: what actually happens, and how long does it take. This page walks through the whole process from your first phone call to the day your debt is legally discharged, including the parts that are easy to miss.

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How Long Does the Consumer Proposal Process Take?

From first consultation to filing is usually one to three weeks, depending on how quickly you can gather your paperwork. Once filed, your creditors have 45 days to vote. The proposal itself then runs for a term you agree up front, up to a maximum of five years, and you can pay it out early without penalty.

The part most people do not expect is how fast the protection starts. The legal stay of proceedings takes effect the moment the proposal is filed, not when creditors finish voting. Collection calls and wage garnishment by unsecured creditors have to stop straight away.

At Metus Lykos Debt Law Firm we guide you through each stage as your lawyers. For the fuller picture of what a Consumer Proposal is and whether you qualify, start with our Consumer Proposal Ontario guide.

What You Will Need to Get Started

Photo ID

Recent Pay Stubs

Last Two Tax Returns

CRA Notices of Assessment

Credit Card Statements

Loan and Line of Credit Statements

Collection Letters

Any Lawsuit or Garnishment Papers

Mortgage or Lease Details

Vehicle Ownership and Loan Papers

RRSP and Savings Statements

A List of Monthly Expenses

What Can Delay the Process

Missing Tax Filings

Incomplete Creditor List

Unreported Income Changes

Assets Not Disclosed Up Front

Delays Returning Paperwork

The Six Stages of a Consumer Proposal

Here is the whole process in order, with rough timing for each stage. Your own timeline may shift depending on how quickly paperwork comes together and how your creditors respond.

Consultation and review (day 1)

We go through your debts, income, assets and expenses, and confirm whether you are insolvent. You leave this meeting knowing which legal options are actually open to you and roughly what each would cost.

Paperwork and preparation (week 1 to 3)

You gather the documents listed above. We build the proposal around what you can realistically sustain, not the largest number that might get approved. Incomplete tax filings are the single most common delay at this stage.

Negotiation before filing (week 2 to 3)

We approach the terms the way your creditors will read them, and press for a structure that is fair and defensible. Doing this before filing avoids a rejected proposal and a wasted 45 days.

Filing and immediate protection (day of filing)

Only a Licensed Insolvency Trustee can file a Consumer Proposal, so we coordinate the filing with one. The legal stay takes effect that day. Collection calls stop, and wage garnishment by unsecured creditors stops.

The creditor vote (45 days)

Creditors have 45 days to accept or reject. Approval is by majority of dollar value among those who vote, not by headcount. If they seek changes, we negotiate them. Your protection continues throughout this window.

Payments, counselling and discharge

You make one monthly payment and attend two required counselling sessions. When the final payment clears you receive a certificate of full performance and the remaining balance is legally discharged.

What Works in Your Favour, and What to Watch

Pros

The benefits of a consumer proposal

Legal protection starts on the day of filing
No court appearance in the ordinary course
Your payment is fixed for the whole term
Interest stops accruing on included debts
You keep your home, car and registered savings
You can pay the proposal out early with no penalty
Creditors who ignore the vote still get bound by the result
One payment replaces every unsecured creditor

Cons

The disadvantages of a consumer proposal

Full financial disclosure is mandatory
Creditors can request changed terms before accepting
Two counselling sessions must be completed
Missing three payments voids the proposal
It stays on your credit report three years past completion

Are You Ready to Start the Process?

You are ready to begin the process if:
Your unsecured debt sits between $10,000 and $250,000
You have steady enough income to sustain a monthly payment
Your tax returns are filed, or can be brought current
You can produce statements for each of your debts
You are prepared to disclose your finances in full
You want the collection calls to stop now, not eventually
You want a lawyer representing you through each stage

If your debt is above $250,000 or sits inside a business, the process differs and a Division 1 Proposal may apply. If you have access to a lump sum and want this resolved in months rather than years, debt settlement is the faster path. To compare the outcome against bankruptcy, read Consumer Proposal vs bankruptcy.

We reduce your debt. Not your dignity.

Consumer Proposal Process FAQs

01 How soon do collection calls stop?

On the day the proposal is filed. The legal stay of proceedings takes effect immediately, not after the creditor vote. If a collector contacts you after filing, refer them to the file and tell us.

02 What happens if my creditors reject the proposal?

Rejection is uncommon, and creditors more often ask for amended terms than refuse outright. If they do, we can negotiate a revised proposal or look at other options. A rejected proposal does not force you into bankruptcy.

03 What are the two counselling sessions?

Two mandatory sessions covering budgeting and money management, required of everyone in a Consumer Proposal. They are short, they are not a test, and completing them is a condition of your discharge.

04 Can I pay it off early?

Yes, with no penalty. Many people pay theirs out ahead of schedule after a raise, a tax refund or a gift. Finishing early also starts the three-year credit reporting clock sooner.

05 What if my income changes during the proposal?

Unlike bankruptcy, your payment does not rise if your income does. If your income falls and payments become unaffordable, contact us straight away. Terms can sometimes be amended, but only if you raise it before payments are missed.

06 What happens if I miss a payment?

One or two missed payments can usually be recovered. If three fall into arrears the proposal is automatically annulled and your creditors' original claims revive in full, including the interest that had stopped. This is the single most important rule in the process.

07 Do I have to tell my employer?

No. There is no requirement to notify your employer, and a Consumer Proposal is not published in a way that would ordinarily reach them. An existing wage garnishment stops, which removes the most likely way it would come up.

08 Is a Consumer Proposal a public record?

It is recorded in the federal insolvency register, which is a searchable public database. In practice it is not something employers, landlords or neighbours routinely check, and it does not appear in a newspaper or local filing.

09 How does this differ from what a trustee does?

A Licensed Insolvency Trustee administers the filing and must remain impartial between you and your creditors. We are a law firm. We advise you on your rights, negotiate the terms, and represent your interests throughout. Our comparison of trustees and debt lawyers explains the distinction.

Our Service Area

Real Debt Help, Wherever You Are in Ontario

Metus Lykos Debt Law Firm proudly serves clients across the entire province of Ontario. Wherever you call home, our lawyers are ready to review your situation and explain your legal options — confidentially, and free of judgment.

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Don't see your city listed? We work with clients across all of Ontario, in person and remotely. If you live in the province, we can help.

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The first step is a conversation, and it costs nothing. Book a free, confidential consultation and we will walk you through exactly what the process would look like in your situation.