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Consumer Proposal in Canada

If debt is becoming unmanageable, a Consumer Proposal may be the safest and most effective government-regulated solution. It allows you to repay only a portion of what you owe, stop interest, stop collections, and protect your home, car, and income — all without filing bankruptcy.

  • Serving Ontario and other provinces
  • Stop wage garnishments
  • Lower your monthly payments
  • Keep your home, car, and RRSPs
  • Avoid bankruptcy
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Call 1-866-570-9988

What Is a Consumer Proposal?

A Consumer Proposal is a formal, legally binding agreement between you and your creditors that allows you to:

  • Repay only a portion of your total debt

  • Stop all interest immediately

  • Stop collection calls, wage garnishments, and creditor lawsuits

  • Keep your home, car, RRSPs, and assets

  • Make one affordable monthly payment for up to 5 years

Consumer Proposals are governed by the Bankruptcy and Insolvency Act (BIA) and must be filed through a Licensed Insolvency Trustee (LIT).


As a law firm, Metus Lykos works directly with you to prepare, negotiate, and structure your Consumer Proposal, then coordinates with an LIT to file it properly and in compliance with Canadian regulations.

What Debts Can Be Included in a Consumer Proposal?

Credit Cards

Lines of Credit

Bank Loans

Payday Loans

Overdrafts

CRA Tax Debt

Student Loans (if out of school > 7 years)

Medical Debt

Personal Loans

Collection Agency Debt

Joint Debts

Business Credit (if personally guaranteed)

Debts NOT Included

Child Support

Spousal Support

Court Fines

Secured Loans (Mortgage, Car Loan)

Student Loans Under 7 Years

Click here to see how we can help!

How to File a Consumer Proposal in Canada (Step-by-Step)

Filing a Consumer Proposal is easier than most people expect.
Here’s how the process works when you do it with a law firm on your side:

01

Free, confidential consultation

We review your debts, income, expenses, assets, and goals. You get clear legal advice on whether a Consumer Proposal is the right option.

02

We calculate your reduction + create your proposal

We determine a realistic repayment amount based on your financial ability — often 25–50% of your total debt.

03

We negotiate with creditors (before filing)

As lawyers, we ensure your repayment terms are strong, fair, and structured to help you succeed.

04

We coordinate with a Licensed Insolvency Trustee (LIT)

Only an LIT can legally file a Consumer Proposal — this is regulated by the Canadian government.

05

Your creditors vote

Consumer Proposals are subject to creditor approval and court confirmation under the Bankruptcy and Insolvency Act. Once accepted, all interest stops, and the repayment plan begins.

06

You make one reduced monthly payment

You keep your home, your car, and your assets. No more collection calls, no legal threats, no surprises.

What are the Pros and Cons of a Consumer Proposal?

Pros

The benefits of a consumer proposal

  • Reduce your debt significantly
  • Keep your home, car, and assets
  • Stop collections and lawsuits immediately
  • Stop wage garnishments
  • Avoid bankruptcy
  • One fixed monthly payment
  • Affordable and predictable
  • Government-regulated and legally binding

Cons

The disadvantages of a consumer proposal

  • Appears on your credit report for the duration of the proposal + 3 years
  • Requires approval from creditors
  • Requires disciplined monthly payments
  • Not ideal for very high-income earners with surplus income
  • Must be filed through a Licensed Insolvency Trustee

Is a Consumer Proposal the Right Option for Me?

  • A Consumer Proposal might be right for you if:

  • You’re struggling with monthly debt payments

  • You want to avoid bankruptcy

  • You want to keep your assets

  • You owe between $10,000 and $250,000 in unsecured debt

  • You need predictable, stable monthly payments

  • You’ve been receiving collection calls or legal notices

  • Interest and penalties are making your debt impossible to manage

If business debt is involved, or if your debt exceeds $250,000, you may need a Division 1 Proposal — we also help with that.

Not sure which option fits?

Take the 30-second Debt Relief Quiz to find out instantly.

We reduce your debt. Not your dignity.

Consumer Proposal FAQs

Typically up to 5 years, but you can pay it off sooner with no penalty.

Yes, temporarily — but far less than bankruptcy. You can start rebuilding immediately once payments begin.

Yes. CRA debt can be included in Consumer Proposals.

Yes. Assets are protected as long as you keep up with secured loan payments.

It’s rare, but creditors can vote against it. If creditors reject a proposal, alternative legal options may be explored depending on your circumstances.

You can amend your proposal, adjust payments, or explore other legal options.

No. Employers are not notified unless you currently have a wage garnishment that must be lifted.

Yes — and spouses/partners can file together if needed.

Bankruptcy is only recommended when no other option exists. A Consumer Proposal is almost always less invasive and more protective.

Take the First Step Toward Becoming Debt-Free

Find out if a Consumer Proposal is the right option for you. Book a free, confidential intake call to better understand your legal options.

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