How Long Does a Consumer Proposal Take in Canada?

How Long Does a Consumer Proposal Take from Start to Finish?

A consumer proposal in Canada takes 60 days minimum from filing to become legally binding—45 days for creditor voting plus 15 days for court approval. The payment period ranges from 1 to 60 months, with most Canadians completing proposals in 3 to 5 years. Over 127,000 Canadians filed consumer proposals in 2025. Creditors approve 99% of proposals. You can pay off the proposal early without penalties. The R7 credit rating lasts 3 years after completion or 6 years from filing, whichever comes first. Faster payoff reduces credit impact from 6 to 4 years total.

Timeline breakdown:

• Day 0: File proposal with Licensed Insolvency Trustee
• Day 1: Stay of proceedings—collection calls stop immediately
• Days 1-45: Creditor voting period
• Day 45: Deemed accepted if less than 25% oppose
• Days 46-60: Court approval waiting period
• Day 60: Legally binding agreement
• Months 1-60: Make monthly payments (customizable term)
• Completion: Certificate issued after final payment plus 2 counselling sessions
• 3 years post-completion: R7 credit rating removed (or 6 years from filing, whichever comes first)

Ryan from Calgary owed $27,300 across credit cards ($18,000), CRA debt ($6,500), and payday loans ($2,800). He consulted a Licensed Insolvency Trustee on January 15, filed on January 22, and received approval on March 23. His proposal offered $310 per month for 48 months, totaling $14,880. The 48-day approval period froze $1,095 in interest charges. Had he waited 6 months to decide, he would have accumulated an additional $4,380 in interest at 19.99% APR.

Every day you delay costs money. On $27,300 debt at 19.99% interest, you accumulate $14.98 daily—$5,467 annually. Filing triggers an immediate stay of proceedings. Interest freezes on day one. Collection calls stop within 24 hours after creditors receive notice.

The 45-Day Creditor Voting Window (What Happens During the Wait)

Creditors have 45 calendar days from the filing date to vote on your consumer proposal. This includes weekends and holidays. The clock starts the moment your Licensed Insolvency Trustee files Form 47 with the Office of the Superintendent of Bankruptcy.

Approval threshold: More than 50% of creditors by dollar value must accept. If less than 25% of proven creditors request a meeting, the proposal is deemed accepted on day 45. No meeting occurs. No further negotiation is required.

Meeting trigger: If 25% or more of creditors by dollar value vote no, your Licensed Insolvency Trustee must schedule a creditor meeting within 21 days. At this meeting, creditors vote in person or by proxy. The same 50% threshold applies.

Section 66.12 of the Bankruptcy and Insolvency Act requires creditors to stop all collection activity immediately upon filing. What stops on day one:

• Collection calls and letters
• Wage garnishments (including active garnishment orders)
• Legal action and lawsuits
• Interest charges on all included debts
• CRA collection activities

Fatima from Brampton owed $41,200 across a line of credit ($19,000), credit cards ($16,500), and medical collections ($5,700). She filed on February 1, 2026. By March 18 (day 45), her proposal was deemed accepted since no creditors requested a meeting. On April 2 (day 60), the court automatically approved it. A wage garnishment order scheduled for February 28 would have taken 25% of her gross wages—$720 monthly on her $2,880 gross income. Filing on February 1 stopped the garnishment before it started. Over 60 months, she avoided $43,200 in garnished wages.

In Ontario, creditors can garnish up to 20% of gross wages without court approval for unsecured debt. The Canada Revenue Agency can garnish up to 50% of wages without a court order. These garnishments execute within 30-60 days of the order being issued.

Court approval follows automatically after the 45-day voting period. The Office of the Superintendent of Bankruptcy and interested parties have 15 days to request a court review. Fewer than 1% of consumer proposals require a court appearance. If no review is requested, the proposal is deemed approved on day 60.

Payment Period Length (1-60 Months with Early Completion Option)

The Bankruptcy and Insolvency Act permits payment periods from 1 to 60 months. No minimum term exists. You can complete a consumer proposal in a single payment or spread it across 5 years. Most Canadians choose 36 to 60 months based on cash flow capacity.

Early completion rules:

• No penalties for early payment
• No interest charges on the proposal amount
• You can increase monthly payments anytime
• You can make lump sum contributions
• You can pay the full remaining balance without restriction

The R7 credit rating is removed 3 years after your final payment. Early completion directly accelerates credit recovery. A 1-year completion results in R7 removal at month 48 (12 months payments plus 36 months post-completion). A 5-year completion results in R7 removal at month 72 (6 years from filing date, maximum duration).

Mortgage timing assumes 2-year post-R7 removal requirement by most A-lenders

Kevin Bouchard from Moncton owed $19,800 across credit cards ($14,200) and a personal loan ($5,600). His original proposal offered $180 monthly for 60 months, totaling $10,800. In year 3, he received a work bonus. He applied $5,000 as a lump sum payment and increased his monthly payments to $280. He completed the proposal in 42 months instead of 60. His R7 credit rating was removed at month 78 (42 months payments plus 36 months post-completion) instead of month 96 (60 months payments plus 36 months). He saved 18 months of credit damage.

Most mortgage lenders require 2 years post-R7 removal for competitive rates. Early completion means faster access to home financing. Every month faster means one month sooner to mortgage approval.

Critical Deadlines That Can Derail Your Timeline

Missing 3 cumulative payments triggers automatic annulment. The payments do not need to be consecutive. Your Licensed Insolvency Trustee tracks total missed payments across the entire proposal term. On the date your third payment comes due without payment, the proposal is annulled automatically.

Annulment consequences:

• Original debts are reinstated in full
• Interest accrues from the filing date
• Creditors resume collection activities immediately
• You cannot file a new proposal on the same debts without court approval
• Court approval for a second proposal adds 3-6 months to the timeline

Grace provision: You can miss or defer 2 payments without consequence. Extra payments made early offset future missed payments. If you pay double in month 6, missing month 12 does not count toward your 3-payment limit.

Sofia Rodrigues from Vancouver owed $33,600. Her proposal offered $240 monthly for 60 months. She missed month 8 due to a $850 car repair. She missed month 14 for a $620 medical expense. Month 19 payment came due. She could not pay. Her proposal was annulled on the due date. The original $33,600 debt was reinstated. Interest at 19.5% average APR accrued for 19 months—$10,260 total. She now owed $43,860 and faced renewed collection calls.

Amendment option: If you anticipate missing payments, contact your Licensed Insolvency Trustee before the third missed payment. You can amend the proposal to reduce monthly payments or extend the term. Creditors must vote on amendments within 45 days. Approval requires the same 50% threshold. Amendment success rate is approximately 80% when filed proactively.

Mandatory counselling sessions: Two credit counselling sessions are required before your completion certificate is issued. Session 1 occurs between days 10-90 after filing. Session 2 occurs at least 30 days after session 1, typically near completion. Each session costs $85, covered by your monthly payments—see consumer proposal fees for the full breakdown. Missing counselling sessions delays your completion certificate by 30-90 days.

R7 Credit Rating Timeline (3 Years After Completion or 6 Years from Filing)

A consumer proposal adds an R7 rating to all included debts on your credit report. The R7 indicates you are making payments through a special arrangement with creditors. This rating appears on your Equifax and TransUnion credit reports within 30 days of filing.

R7 removal formula: The R7 rating is removed 3 years after your final payment OR 6 years from the filing date, whichever comes first. The 6-year maximum is a hard cap regardless of payment duration.

Fast-track example: You complete your proposal in 12 months. The R7 is removed at month 48 (12 months payments plus 36 months post-completion). Your total credit impact is 4 years from filing date.

Maximum duration example: You complete your proposal in 60 months. The R7 is removed at month 72 (6 years from filing date, not 8 years). Your total credit impact is 6 years from filing date.

The R7 rating impacts mortgage qualification, credit card applications, and auto loans. Most A-lenders (major banks) require the R7 to be removed before approving mortgages at competitive rates. B-lenders and alternative lenders approve mortgages with active R7 ratings but charge 2-4% higher interest rates. Most mortgage brokers recommend waiting 2 years post-R7 removal for optimal rates.

Credit rebuilding during a proposal:

• Open a secured credit card (available with active R7)
• Use the card for small purchases ($50-100 monthly)
• Pay the full balance monthly before the due date
• This builds positive payment history despite the R7 rating

Your credit score drops 150-200 points immediately after filing. The score begins recovering within 6-12 months as you make consistent payments. By completion, most individuals rebuild scores to 620-680 range. Two years post-R7 removal, scores typically reach 680-720 with disciplined credit use.

Ahmed Hassan from Toronto owed $22,400 across credit cards ($16,800) and collections accounts ($5,600). He completed his proposal in 18 months by making $480 monthly payments plus a $3,000 lump sum from his tax refund. His R7 was removed at month 54 (18 months payments plus 36 months post-completion). He qualified for a mortgage pre-approval at month 78 (54 months plus 24 months post-R7 lender requirement). His total timeline from filing to mortgage approval was 6.5 years instead of 10 years if he had taken the full 60 months to pay.

Free Consultation to First Payment (The Pre-Filing Phase)

Understanding your credit timeline helps you plan the next steps. Here’s how the pre-filing phase actually works.

Initial consultations with Licensed Insolvency Trustees are free and confidential. No obligation exists to file after the consultation. Most consultations last 60-90 minutes and can occur in person or virtually. You should consult 2-3 Licensed Insolvency Trustees to compare proposals and personalities before deciding.

Documents required for consultation:

• Government-issued photo ID
• List of creditors with balances
• Recent pay stubs or income proof
• Asset list (vehicles, property, investments, RRSPs)
• Monthly expense breakdown

Gathering these documents takes 1-2 hours. Most consultations happen within 1 week of initial contact.

Filing timeline after decision: You can file the same day as your consultation or up to several weeks later. Filing requires the $114.88 government fee payable to the Office of the Superintendent of Bankruptcy. Some Licensed Insolvency Trustees charge an upfront administrative fee (typically $300-750 plus tax, maximum $962.38 in Ontario). Many firms waive upfront fees and roll all costs into monthly payments.

First payment timing: Your first proposal payment is due 30-45 days after filing, depending on your Licensed Insolvency Trustee’s payment schedule. Some trustees collect the first payment immediately to cover initial filing costs. Others delay the first payment until after creditor approval on day 60.

Jennifer Park from Halifax owed $31,900 across credit cards ($24,500) and a payday loan ($7,400). She contacted a Licensed Insolvency Trustee on Monday morning. She gathered documents Tuesday and Wednesday. She attended her consultation Thursday morning. She decided to proceed and signed the proposal Thursday afternoon. The trustee filed Form 47 with the Office of the Superintendent of Bankruptcy Thursday at 4 PM. Collection calls stopped Friday morning after creditors received notice. Her total timeline from decision to relief was 4 days. Had she delayed 6 months while “thinking about it,” she would have paid an additional $2,210 in interest at 19.99% APR on her credit card balances. The immediate filing also prevented a scheduled wage garnishment that would have taken $680 monthly from her paycheque.

Every week of delay costs money. On $31,900 debt at 19.99% average APR, interest accumulates $123 weekly. That’s $492 monthly—money that could reduce your proposal amount instead.

Provincial Timing Variations and Special Circumstances

The Bankruptcy and Insolvency Act is federal legislation. Consumer proposal timelines are identical across all provinces and territories. The 45-day creditor voting period, 60-day approval timeline, and 60-month maximum payment period apply nationwide.

Court processing: No significant provincial variation exists in deemed approval timing. All provinces process consumer proposals through the federal Office of the Superintendent of Bankruptcy system.

Licensed Insolvency Trustee availability: Rural and remote areas may have longer consultation wait times. Urban centers like Toronto, Vancouver, Montreal, and Calgary offer same-week consultations. Ontario has 412 active Licensed Insolvency Trustees compared to 43 in Saskatchewan and 127 in British Columbia, according to the Office of the Superintendent of Bankruptcy 2025 directory. Remote communities in northern Ontario, Saskatchewan, and British Columbia may require 2-3 weeks for in-person meetings. Virtual consultations reduce this gap significantly.

Division I proposals: Debts exceeding $250,000 (excluding your principal residence mortgage) require Division I proposals instead of consumer proposals. Division I proposals mandate court filing and a creditor meeting. Court approval adds 30-60 days to the timeline. Monthly payment maximums do not apply—you can extend payments beyond 60 months with creditor approval.

Amendment timeline: If you need to change your proposal terms after filing, creditors must vote on the amendment. The amendment triggers another 45-day voting period. This adds 45-60 days to your timeline. Amendments typically occur when income drops significantly or unexpected expenses emerge.

Complex proposals: High income, multiple secured creditors, or business debts require additional preparation time. Your Licensed Insolvency Trustee may need 2-3 weeks to structure the proposal optimally. This preparation time occurs before filing and does not affect the post-filing timeline.

Most Canadians complete simple consumer proposals without amendments or complications. The standard 60-day approval timeline applies to 95% of filings. Complex situations represent fewer than 5% of consumer proposal filings.

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Ready to stop collection calls and freeze your debt? Find a Licensed Insolvency Trustee to file your proposal within 7 days of your first consultation. Interest freezes on day one. You’ll have a legally binding agreement within 60 days. Early completion cuts your credit impact from 6 to 4 years.