Consumer Proposal FAQ: 50+ Questions Answered for 2026

A consumer proposal is a legally binding debt settlement that allows Canadians owing $1,000–$250,000 in unsecured debt to repay 30–80% of what they owe over up to 5 years. Filed through a Licensed Insolvency Trustee (LIT), it freezes interest, stops collection calls, and protects your assets—including your home, car, and tax refunds. Creditors vote within 45 days. If the majority by dollar value accepts, the proposal becomes binding on all creditors. It appears on your credit report as an R7 rating and is removed 3 years after completion or 6 years from filing, whichever is first.

This hub answers 50+ frequently asked questions organized by category: eligibility, costs, process, credit impact, spousal effects, and what happens if things go wrong.

Who Qualifies for a Consumer Proposal? (Eligibility Requirements)

You qualify for a consumer proposal if you owe between $1,000 and $250,000 in unsecured debt, excluding your mortgage on your principal residence. You must be insolvent. This means your assets are worth less than your debts OR you cannot pay your bills on time. You must live in Canada, own property in Canada, or operate a business in Canada.

You need stable, consistent income to afford monthly payments. The Bankruptcy and Insolvency Act does not mandate a specific dollar threshold. Your LIT will assess whether creditors are likely to accept your offer based on your income and expenses.

Eligible debt types include:

• Credit card balances
• Lines of credit
• Personal loans
• Payday loans
• Canada Revenue Agency (CRA) tax debt
• Medical bills (rare in Canada but possible for prescription costs or private services)
• Utility arrears

Ineligible debts include:

• Secured debts (car loans, mortgages, Home Equity Lines of Credit)
• Student loans under 7 years old from your last study date
• Court fines and penalties
• Child support and spousal support
• Debts arising from fraud

Debt over $250,000 (excluding mortgage)? You must file a Division I proposal instead. This requires stricter requirements, court hearings, and formal creditor meetings. If your income is insufficient to make realistic monthly payments, your LIT will not file your proposal. Creditors reject proposals that offer unreasonably low settlements.

Couples can file a joint consumer proposal if their combined unsecured debt does not exceed $500,000. This is often advantageous when both spouses have debt and want coordinated relief.

Real consequence: Every month of delay on $25,000 in credit card debt at 21% APR costs you $437 in interest. That compounds daily. If you qualify, waiting costs more than acting.

Can you file a consumer proposal if you’re unemployed?

No, you cannot file without stable income. Creditors will reject proposals from unemployed filers because you cannot demonstrate ability to make payments. You can file if you receive EI, disability benefits, or pension income. Those payments must be stable and sufficient for your monthly proposal amount. Your LIT will calculate whether your income after essential expenses leaves enough for creditor payments.

Does filing a consumer proposal affect your employment?

No, your employer is not notified when you file a consumer proposal. Under federal law, employers cannot fire you solely for filing insolvency proceedings. If your employer runs a credit check during employment (rare outside financial services), they will see the R7 rating. Most employers do not monitor existing employees’ credit.

If you work in financial services, law enforcement, or roles requiring security clearance, disclose your proposal during the hiring process to avoid complications.

Can you file a consumer proposal if you’ve already filed bankruptcy?

Yes, you can file a consumer proposal after being discharged from bankruptcy. There is no waiting period between discharge and filing a new proposal. If you’re currently in an active bankruptcy, you cannot file a consumer proposal simultaneously. You must complete your bankruptcy first.

If you filed bankruptcy in the past and accumulated new debt, a consumer proposal is often a better solution. It avoids a second bankruptcy notation on your credit report.

Speak with a Licensed Insolvency Trustee to confirm your eligibility—free consultation, no obligation to proceed.

How Much Does a Consumer Proposal Cost? (Fees and Payment Structure)

A consumer proposal costs $102.20 to file, payable to the Superintendent of Bankruptcy. This fee is deducted from your first payment. All other fees are built into your monthly payments—you do not pay additional charges.

Trustee fees are regulated by the federal government and include:

• $750 at filing
• $750 at court approval
• $85 per mandatory counselling session (two sessions = $170 total)
• 20% of all funds distributed to creditors

See consumer proposal fees in detail for the full breakdown. Your LIT calculates these fees when structuring your proposal. Your $9,000 proposal includes all fees. Trustee fees, filing costs, and creditor payments are built in. You do not receive a separate bill.

Typical settlement ranges from 30–50% of your total debt. The exact percentage depends on your income, assets, household size, and debt level. Creditors compare your proposal offer to what they would receive if you filed bankruptcy. If bankruptcy would give them nothing (because you have no non-exempt assets and low income), they often accept 30% in a proposal.

Example: $30,000 in unsecured debt at 30% settlement = $9,000 total payment over 5 years = $150/month. Compare that to minimum payments of $600/month for 47 years at 21% interest, totaling $33,600 in payments.

Zero upfront cost is required beyond the $102.20 filing fee. Your LIT does not charge consultation fees. If an LIT requests payment before filing, find a different trustee. This is not standard practice.

Get your personalized estimate: Our Consumer Proposal Calculator shows exactly what you’d pay based on your debt, income, and province. Free, instant results.

Real consequence: Continuing minimum payments on $25,000 credit card debt at 21% APR means you will pay $6,300 per year in interest alone if you only cover minimums. A consumer proposal freezes that interest immediately.

What determines how much you pay in a consumer proposal?

Your LIT calculates your proposal offer based on four factors. First, surplus income (monthly income minus allowable expenses). Second, asset equity (value of property you own minus secured debts). Third, what creditors would receive in bankruptcy. Fourth, what creditors are likely to accept.

The goal is to offer creditors more than they would get in bankruptcy but less than your full debt. Your LIT reviews your budget. They determine the maximum monthly amount you can afford without financial hardship.

Can you pay off a consumer proposal early?

Yes, you can pay off your consumer proposal early with no penalties. Paying early shortens the time it stays on your credit report. If you complete payments in 2 years instead of 5, your proposal is removed from your credit report 5 years after filing instead of 6.

Some people receive tax refunds, bonuses, or inheritances. They use them to finish early. Your LIT issues your Certificate of Full Performance as soon as you complete payments and counselling sessions.

Do you still pay if your income increases during a consumer proposal?

No, your monthly payment is fixed when the proposal is approved. Bankruptcy increases payments when income rises. Consumer proposals lock your payment at the agreed amount. If you get a raise, promotion, or new job with higher pay, you keep that extra income.

This makes proposals attractive for people expecting income growth. You pay the same $150/month whether you earn $40,000 or $80,000.

Consumer Proposal vs. Bankruptcy: Key Differences

Use our consumer proposal calculator to estimate your monthly payment and see your potential savings compared to bankruptcy.

How Does a Consumer Proposal Affect Your Credit Score and Report?

Your consumer proposal appears on your credit report as an R7 rating on all accounts included in the proposal. This indicates you’re repaying debt through a special arrangement. Your credit score typically drops 100–150 points at filing.

The proposal stays on your credit report for 3 years after completion OR 6 years from filing date, whichever comes first.

Timeline examples:

• Complete in 2 years: Removed after 5 years total (2 years active + 3 years post-completion)
• Complete in 4 years: Removed after 6 years total (maximum cap applies)
• Complete in 5 years: Removed after 6 years total (5 years active + 1 year post-completion)

Bankruptcy stays on your credit report for 7 years after discharge. A consumer proposal clears your report faster if you complete it within 3 years.

Your LIT issues your Certificate of Full Performance after your final payment. You must also complete two counselling sessions first. Your LIT notifies the Office of the Superintendent of Bankruptcy. The OSB then notifies Equifax and TransUnion. Credit bureaus take 3–5 months to update your file with the completion date.

During the 3-year post-completion period, your credit report shows the proposal as “completed” or “satisfied.” This is better than showing it as “active.” Lenders see you finished what you started.

Real consequence: Paying off early shortens total credit report impact. If you complete your proposal in 1 year using a lump sum (inheritance, bonus), it’s removed after 4 years total instead of 6. That’s 2 years earlier access to prime-rate mortgages, car loans, and credit cards.

Can you rebuild credit during a consumer proposal?

Yes, rebuilding credit during your proposal helps you recover faster after completion. Keep one credit card with a $0 balance at filing. Use it monthly for small purchases (gas, groceries) and pay the balance in full.

Apply for a secured credit card during your proposal. Deposit $300–$1,000 as collateral. Use the card responsibly. Your on-time payments during the proposal demonstrate credit responsibility to future lenders.

Report your monthly proposal payments to credit bureaus if your LIT offers this service (not all do). Each on-time payment builds positive history.

What credit score can you expect after completing a consumer proposal?

Your credit score after completion depends on your activity during and after the proposal. Most people reach 600–650 within 6–12 months of completion if they used secured credit cards. They also maintained on-time payments. Scores of 680–750+ are achievable within 2–3 years post-completion with responsible credit use.

Some people never rebuild credit because they avoid all credit after their proposal. This keeps scores low (under 600) indefinitely. You need active credit use to rebuild scores.

Does a consumer proposal affect your ability to get a mortgage?

Yes, getting a mortgage during an active consumer proposal is difficult. A-lenders (major banks) typically decline applications from active proposal filers. B-lenders (alternative lenders) may approve mortgages during proposals. They require 20%+ down payment. Interest rates run 3–5% above prime.

After completion, you can qualify for A-lender mortgages 1–2 years post-completion. Your credit score must reach 650+. You need stable employment. Expect higher rates (0.5–2% above prime) until the proposal falls off your credit report entirely.

What Happens During a Consumer Proposal? (Process, Timeline, and Restrictions)

Your LIT files your proposal with the Office of the Superintendent of Bankruptcy. Filing immediately triggers a stay of proceedings under Section 69 of the Bankruptcy and Insolvency Act. This means creditors must stop all collection activity, including calls, letters, lawsuits, and wage garnishments.

Process timeline:

1. Free consultation (1 hour): Your LIT reviews your debts, income, assets, and expenses. They determine if a consumer proposal is your best option. They calculate a realistic monthly payment creditors will accept.

2. Proposal preparation and filing (1–2 weeks): Your LIT prepares Form 79 (the legal proposal document) listing all creditors, amounts owed, and your settlement offer. You sign the form. Your LIT files it with the OSB and sends copies to all creditors.

3. Creditor voting period (45 days): Creditors review your proposal and vote to accept or reject. Voting is by dollar value, not number of creditors. If creditors representing 51% of your debt vote yes, the proposal is approved. Creditors who don’t vote are deemed to accept.

4. Court approval (automatic): After creditor acceptance, a court registrar reviews and approves your proposal. This happens automatically unless procedural issues exist (rare). You do not attend court.

5. Payment period (up to 60 months): You make fixed monthly payments to your LIT. Your LIT distributes funds to creditors quarterly or semi-annually. You attend two mandatory credit counselling sessions (1–2 hours each).

6. Certificate of Full Performance: After your final payment and completion of counselling, your LIT issues your certificate. You receive a copy. Your LIT notifies the OSB, which updates credit bureaus.

What you CAN do during a consumer proposal:

• Keep one credit card with a $0 balance at filing
• Apply for secured credit cards
• Travel domestically and internationally without restrictions
• Apply for a new passport without disclosure
• Get a mortgage or car loan (approval difficult, rates high)
• Change jobs or move to a new address (notify your LIT)
• Receive tax refunds (you keep them, unlike in bankruptcy)
• Inherit money or receive gifts (you keep them)

What you CANNOT do during a consumer proposal:

• Incur new debt over $1,000 without informing creditors (BIA requirement under Section 66.33)
• Miss 3 payments (automatic annulment)
• Transfer assets below fair market value
• Fail to attend mandatory counselling sessions
• Ignore your LIT’s requests for updated income information

Real consequence: Obtaining credit over $1,000 without disclosing your proposal is a breach. If creditors discover this, they can apply to annul your proposal. Your full debt is reinstated. Always disclose your proposal status when applying for loans, credit cards, or financing.

Can you get a car loan during a consumer proposal?

Yes, you can get a car loan during a consumer proposal. Expect subprime rates (8–15% vs. prime 3–6%). Subprime lenders specialize in lending to people with active proposals. They require proof of income, stable employment, and often a larger down payment (10–20%).

Your LIT must be notified if the loan amount exceeds $1,000. Some LITs include this requirement in your proposal terms. Leasing is generally not available during an active proposal.

Do you have to report new income to your LIT during a proposal?

No, you are not required to report income increases to your LIT. Your monthly payment is fixed regardless of income changes. However, your LIT may contact you annually to update your financial information for their records.

If your income drops significantly and you cannot afford payments, contact your LIT immediately. Discuss amendment options. Do not wait until you’ve missed payments.

Can you start a business during a consumer proposal?

Yes, you can start a business during a consumer proposal. You are not restricted from entrepreneurship. If your business requires financing over $1,000, disclose your proposal status to lenders.

If you incorporate, the corporation is a separate legal entity. It is not bound by your personal proposal. However, lenders may require personal guarantees. This could complicate matters if the business fails. Discuss business plans with your LIT to understand how they affect your proposal obligations.

Find a Licensed Insolvency Trustee to start your consumer proposal and stop collection calls within 48 hours.

What Happens If You Miss Payments or Need to Amend Your Proposal?

Missing 3 monthly payments or falling 3 months behind your payment schedule triggers automatic annulment. Section 66.31 of the Bankruptcy and Insolvency Act mandates this. Annulment means your proposal is cancelled. Your full debt is reinstated. Creditors regain all legal rights to sue, garnish wages, and report missed payments to credit bureaus.

Consequences of annulment:

• Full debt balance is restored (minus payments already made to creditors)
• Interest and penalties resume accruing
• CRA adds back frozen interest and penalties on tax debt
• Creditors can restart collection activity within days
• Your credit report shows “Consumer Proposal Annulled” (worse than R7)
• You lose legal protection from lawsuits and garnishments

Grace period: You can miss or defer 1–2 payments without annulment. Your LIT adds missed payments to the end of your schedule. This extends your completion date. If you miss your January payment, your LIT adds it to the end. Your final payment pushes from month 60 to month 61.

Revival and reinstatement after annulment:

You have a 30-day automatic revival period after annulment. Catch up all missed payments within 30 days. Your proposal is reinstated automatically. No creditor approval is required.

After 30 days, you must apply to the Office of the Superintendent of Bankruptcy or court for discretionary revival. You need proof of hardship (job loss, illness, emergency). Creditors and the court must approve revival. This is time-consuming and uncertain.

Amendment process:

If you cannot afford your current monthly payment, request an amendment before you miss 3 payments. Amendments change your proposal terms. Lower your monthly amount or extend your timeline. Your LIT files an amended proposal with new terms. Creditors vote again.

Amendments require majority approval by dollar value, the same as the original proposal. Creditors often accept amendments if the alternative is annulment and receiving nothing.

Real consequence: You had $30,000 in debt reduced to a $12,000 proposal. You paid $4,000 before annulment. You owe $30,000 minus $4,000 = $26,000 balance. That $26,000 accrues interest immediately. CRA adds penalties. Credit card companies sell your account to collections. You’re back to square one, but with fewer options.

What counts as a missed payment?

A missed payment is any month where you do not pay the agreed amount. Payment is $200/month. You pay $100. You missed $100. If you miss $100 three times, you’re 3 months behind. You face annulment. Partial payments do not reset the counter.

Some LITs allow brief delays (paying on the 15th instead of the 1st) without counting it as a miss. Confirm grace periods with your LIT upfront.

Can you file bankruptcy if your consumer proposal is annulled?

Yes, filing bankruptcy is an option if your consumer proposal is annulled. Many people file bankruptcy after annulment because their financial situation worsened. Your LIT can transition you from an annulled proposal to bankruptcy.

Creditors receive dividend payments made during your proposal. The bankruptcy addresses the remaining balance. You lose the benefits of a proposal (fixed payments, keeping all assets). You gain discharge from debt.

How often do consumer proposals get annulled?

Approximately 20–25% of consumer proposals are annulled due to missed payments. The most common reasons are job loss, illness, underestimating expenses, or unrealistic budgets at filing.

Working with an experienced LIT who accurately assesses affordability reduces annulment risk. If your budget is tight, consider filing bankruptcy instead. File bankruptcy instead of a proposal you cannot complete.

How Does a Consumer Proposal Affect Your Spouse, Assets, and Mortgage?

Filing a consumer proposal does not affect your spouse’s credit score or debts unless those debts are joint. Your spouse’s solely-owned assets, credit accounts, and credit rating remain unaffected.

Joint debts:

If you have joint credit cards, joint lines of credit, or co-signed loans, your spouse remains 100% liable for the full balance. Your proposal eliminates your liability. Your spouse still owes the full amount. Creditors will pursue your spouse for payment. Your spouse’s credit report will show missed payments if they cannot afford the full payment alone.

Spouse’s income:

Your spouse’s income is not included in your consumer proposal calculations. Your LIT only considers your personal income when determining your monthly payment. You earn $45,000/year. Your spouse earns $80,000/year. Only your $45,000 is relevant. Creditors cannot access your spouse’s income or assets to satisfy your proposal.

Jointly-owned assets:

If you own property jointly with your spouse, only your 50% share of equity is considered in your proposal. Your LIT calculates the equity (fair market value minus secured debts). They divide it by two. Creditors expect compensation for your share through higher monthly payments or a lump sum.

Example: Your home is worth $400,000. The mortgage balance is $300,000. Total equity is $100,000. Your share is $50,000. Your LIT structures your proposal to compensate creditors for that $50,000 equity. You might offer $20,000 over 5 years. You argue creditors would receive less in bankruptcy due to provincial exemptions.

You do not lose the asset. Your spouse’s 50% share is protected. You keep the home as long as you maintain mortgage payments.

Matrimonial home considerations:

If your home has no equity or negative equity, it is not a factor in your proposal. You can continue mortgage payments and keep the home. If you have significant equity, you must compensate creditors.

Some people refinance the mortgage to access equity. They pay a lump sum into their proposal. This completes it early. Others make higher monthly payments over 5 years.

Asset transfers in the 5 years before filing:

Your LIT reviews all asset transfers in the 5 years before filing. If you transferred property, vehicles, or money to your spouse below fair market value, creditors can challenge those transfers. Courts can reverse transfers made to hide assets before insolvency.

Selling your $30,000 car to your spouse for $1,000 six months before filing is reviewable. The $29,000 difference is added back to your proposal calculations.

Real consequence: You and your spouse have a joint credit card with a $15,000 balance. Your proposal eliminates your $7,500 liability. Your spouse owes $15,000 (not $7,500). Creditors pursue your spouse for the full balance. Many couples file joint proposals to address this issue and split the settlement 50/50.

Should married couples file a joint consumer proposal?

Couples should file a joint proposal if both have significant debt. Combined unsecured debt must be under $500,000. Joint proposals simplify administration (one set of payments, one LIT, one set of fees). Each spouse contributes based on their income.

If only one spouse has debt, a joint proposal is unnecessary. If both have debt but one spouse has low income and few assets, filing separately may be better. Your LIT will assess which approach benefits you more.

Can your spouse’s assets be seized in your consumer proposal?

No, your spouse’s solely-owned assets cannot be seized in your consumer proposal. Your spouse owns a car, savings account, or investments in their name alone. Those assets are protected. Creditors cannot access your spouse’s property to satisfy your proposal. Only your personal assets and your share of jointly-owned assets are considered.

Does filing a consumer proposal affect spousal support or child support payments?

No, spousal support and child support obligations are not discharged in a consumer proposal. You must continue making court-ordered support payments in full. Those payments are deducted from your income when your LIT calculates your surplus income and monthly proposal payment.

If you owe arrears (past-due support), those amounts are not included in your proposal. They must be paid separately.

Can a Consumer Proposal Be Rejected by Creditors?

Yes, creditors can reject your consumer proposal during the 45-day voting period. Rejection means your proposal does not become binding. You are not legally protected from collection activity. Creditors can resume calls, lawsuits, and wage garnishments.

Creditor voting process:

Creditors have 45 days from your filing date to vote. Voting is by dollar value, not number of creditors. A creditor owed 51% of your total debt can approve your proposal. This happens even if all other creditors vote no. Creditors who do not respond by the deadline are deemed to accept. This means most proposals pass even if only a few creditors actively vote yes.

Creditor options during the 45-day period:

1. Accept as-is: The creditor agrees to your settlement offer. No further action is required.
2. Request a creditors’ meeting: The creditor wants to negotiate better terms. Meetings must be requested by creditors representing at least 25% of your debt. At the meeting, creditors can propose changes (higher monthly payment, shorter timeline). You can accept revised terms or withdraw your proposal.
3. Reject outright: The creditor votes no and refuses to negotiate. If creditors representing 50%+ of your debt reject, your proposal fails.
4. Do nothing: Creditors who do not vote are deemed to accept. This is the most common outcome. Many creditors do not vote because the administrative cost of voting exceeds their expected recovery.

What happens if your proposal is rejected:

If creditors reject your proposal, you have several options:

• Revise your offer and refile. Increase your monthly payment, shorten the timeline, or offer a lump sum. Your LIT submits the revised proposal for another 45-day voting period.
• File bankruptcy. Many people file bankruptcy after rejection because their debt is unmanageable and creditors are unwilling to compromise.
• Pursue alternative debt solutions. Debt consolidation loans, credit counselling, or informal settlements with individual creditors.
• Continue with no formal insolvency filing. Negotiate directly with creditors or allow debts to go to collections.

Court approval after creditor acceptance:

Once creditors accept your proposal, a court registrar reviews it for procedural compliance. The court checks that your LIT followed filing rules. Creditors received proper notice. The proposal terms are reasonable.

Court approval is automatic in 99% of cases. The court only requests a hearing if procedural issues exist. Incomplete forms or unrealistic settlement terms are examples. Your LIT represents you at any court hearing. You do not attend.

Typical acceptance rate:

Licensed Insolvency Trustees screen proposals before filing. They assess whether creditors are likely to accept based on your financial situation and typical creditor behavior. Most proposals pass creditor vote. LITs only file proposals with strong approval odds. Proposals offering less than 20% settlement have higher rejection risk unless your income and assets justify the low offer.

Real consequence: A single creditor is owed 60% of your debt (such as CRA for tax debt). That creditor has de facto veto power. If CRA votes no, your proposal fails even if all other creditors vote yes. Your LIT will contact major creditors before filing to gauge their willingness to accept.

Can you negotiate with creditors before filing?

No, you cannot negotiate directly with creditors before filing a consumer proposal. All negotiations happen through your LIT. Some LITs contact major creditors informally before filing. They assess their likely response. This is not a formal negotiation. It’s a courtesy call to confirm the proposal will not be immediately rejected. Creditors cannot commit to accepting before they see the formal proposal document.

What makes creditors more likely to accept?

Creditors accept proposals that offer more than they would receive in bankruptcy. You have no assets and low income. Creditors receive $0 in bankruptcy. They often accept 20–30% in a proposal.

You own a home with $80,000 equity. Creditors expect compensation for that equity. You might need to offer 50–60% settlement. Or refinance your mortgage to pay a lump sum. Creditors also prefer proposals from employed filers with stable income over unemployed filers.

Do all creditors have to accept for the proposal to pass?

No, only a majority by dollar value must accept. Creditors owed 51% of your debt vote yes. The proposal binds all creditors—even those who voted no. Creditors who voted no must accept your settlement. They cannot pursue legal action. This majority rule prevents holdout creditors from blocking proposals that benefit most creditors.

Worried about creditor rejection? Work with an experienced Licensed Insolvency Trustee who pre-screens proposals to maximize approval odds—book your free consultation now.

What Happens After You Complete a Consumer Proposal?

After you make your final payment and complete two mandatory credit counselling sessions, your LIT issues your Certificate of Full Performance. This legal document confirms you met all proposal obligations. Your LIT sends copies to you, the Office of the Superintendent of Bankruptcy, and all creditors.

The OSB notifies Equifax and TransUnion of your completion. Credit bureaus update your file within 3–5 months. Your proposal status changes from “active” to “completed” on your credit report. The R7 rating remains. The completion date starts the 3-year countdown to removal.

Credit report timeline after completion:

Your proposal is removed from your credit report 3 years after completion. You complete your proposal on June 1, 2026. It falls off your report on June 1, 2029. During those 3 years, your report shows the proposal as satisfied. This is better than showing an active proposal. Lenders see you finished what you started.

You took the full 5 years to complete. Your proposal is removed 6 years from filing (not 3 years after completion). The 6-year cap prevents proposals from staying on reports for 8 years (5 years active + 3 years post-completion).

Credit rebuilding after completion:

You can rebuild your credit score to 680–750+ within 1–2 years after completion. Use credit responsibly. Apply for a secured credit card immediately after completion if you do not already have one. Use it monthly for small purchases. Pay the balance in full.

After 6–12 months, apply for an unsecured credit card. Your approval odds improve as time passes since completion.

Consider a credit-builder loan through a credit union. You borrow $1,000. The credit union holds it in a savings account. You make monthly payments. After 12 months, you receive the $1,000 plus interest. This builds positive payment history on your credit report.

Avoid carrying balances over 30% of your credit limit. High utilization rates lower your score. Keep credit card balances under $300 if your limit is $1,000.

Post-completion credit access:

Secured credit cards are available immediately after completion. You deposit $500–$2,000 as collateral. You receive a credit card with a matching limit. Unsecured credit cards become available 1–2 years after completion if your credit score reaches 600+. Subprime lenders specialize in post-proposal credit cards. Annual fees run $50–$120. Interest rates range 19–29%.

Car loans through subprime lenders are available 6–12 months after completion. Expect interest rates of 8–15% vs. prime rates of 3–6%. A-lender car loans become available 2–3 years post-completion with good credit scores.

Mortgages are the hardest credit product to access post-proposal. B-lenders may approve mortgages 1–2 years after completion. They require 20%+ down payment. Interest rates run 2–4% above prime. A-lender mortgages (major banks) require 2–3 years post-completion. Credit scores must reach 650+. You need stable employment. Some A-lenders require the proposal to be off your credit report entirely before approving prime-rate mortgages.

Real consequence: Pay off your proposal in 2 years instead of 5. It falls off your credit report in 2029 instead of 2032 (assuming 2026 filing). That’s 3 years earlier access to prime-rate mortgages. Potentially saves $15,000–$30,000 in interest over a 25-year mortgage.

Do you get your Certificate of Full Performance immediately after your last payment?

No, you receive your certificate after your last payment AND completion of two mandatory credit counselling sessions. Each session lasts 1–2 hours. They cover budgeting, credit rebuilding, and financial management.

Last payment in March. Counselling not finished until June. You receive your certificate in June. The completion date for credit reporting purposes is the date you satisfy all obligations, including counselling.

Can you get another consumer proposal after completing one?

Yes, you can file another consumer proposal after completing your first one. There is no waiting period or lifetime limit on proposals. You accumulate new debt after completion. You become insolvent again. You can file a new proposal.

Your LIT will assess whether creditors are likely to accept a second proposal. Some creditors are skeptical of repeat filers. They may reject proposals from people who filed multiple times. However, many Canadians successfully file second proposals after major life events. Job loss, divorce, or medical emergencies are examples.

What if you never received your Certificate of Full Performance?

Your LIT does not issue your certificate after completion. Contact them immediately. LITs are required by law to issue certificates within a reasonable time after you satisfy all obligations.

Your LIT is unresponsive. Contact the Office of the Superintendent of Bankruptcy. The OSB regulates LITs. They can compel them to issue certificates. Your LIT has closed their practice. The OSB will assign your file to another trustee to complete administration.

Real-World Scenarios

Jennifer, 38, Halifax: Credit Card and CRA Tax Debt

Jennifer is a 38-year-old graphic designer from Halifax with $38,400 in unsecured debt. She owes $22,000 across three credit cards (RBC, CIBC, Scotiabank). She owes $16,400 in CRA tax debt from 2023–2024. Her income dropped from $62,000/year to $41,000 during an economic downturn. She missed 4 months of minimum payments. Her credit cards charge 21% interest. CRA added penalties and threatened wage garnishment.

Jennifer met with a Licensed Insolvency Trustee. Her LIT calculated she could afford $250/month. They filed a consumer proposal offering $12,000 over 48 months. Creditors voted. RBC, CIBC, and CRA accepted. Scotiabank did not vote and was deemed to accept.

Jennifer now pays $250/month for 48 months instead of $850/month in minimums for 10+ years. She saves $26,400 in debt forgiveness. Interest stops accruing immediately, saving $4,600/year. Her proposal is filed in 2026 and will be removed from her credit report in 2030 (4 years active + 0 years post-completion, capped at 6 years from filing). She kept her car, laptop, and all other assets.

Raj, 29, Winnipeg: Line of Credit and Payday Loan Spiral

Raj is a 29-year-old warehouse supervisor from Winnipeg earning $48,000/year. He owes $17,800 total. He owes $12,000 on an unsecured TD line of credit at 9.5%. He owes $5,800 across three payday loans charging 400%+ APR. He borrowed from Money Mart, Cash Money, and a local lender to cover unexpected car repairs. Each payday, he pays $950 in interest and minimums. He cannot reduce the principal.

Raj filed a consumer proposal through an LIT offering $6,200 over 36 months at $172/month. Payday lenders and TD voted yes. Raj saves $11,600 in debt forgiveness. He eliminates predatory payday interest immediately. His proposal completes in 3 years. It falls off his credit report in 2032 (3 years active + 3 years post-completion = 6 years from filing).

Raj used the $778/month he saved ($950 old payments minus $172 proposal payment) to build a $4,000 emergency fund. He never needed payday loans again.

Alicia, 44, Kelowna: Medical Emergency and Job Loss

Alicia is a 44-year-old former retail manager from Kelowna with $29,600 in debt. She owes $18,000 across two credit cards (Capital One, MBNA). She owes $11,600 on a personal loan from Fairstone Financial. She earned $52,000/year before a chronic illness diagnosis. She took 6 months off work. Employment Insurance benefits covered rent but not minimum payments. She returned part-time at $34,000/year. Creditors threatened lawsuits.

Alicia filed a consumer proposal offering $10,500 over 60 months at $175/month. Creditors accepted a 35% settlement. She kept her home (no equity, manageable mortgage). Her proposal completes in 2031. It falls off her credit report in 2032 (5 years active + 1 year post-completion = 6 years from filing).

After completion, Alicia rebuilt credit with a secured credit card. She qualified for an unsecured credit card in 2033. Her credit score reached 720 by 2034.

Stop collection calls, freeze interest, and reduce your debt by up to 70%. Book a free consultation with a Licensed Insolvency Trustee today to get your consumer proposal options in 60 seconds—no obligation, no judgment.