Home » Blog » The Ultimate Guide to a Consumer Proposal

The Ultimate Guide to a Consumer Proposal

Jennifer Croft

Jennifer Croft

Dealing with debt can be overwhelming and stressful, and finding the right solution can be a challenge. One option for managing debt without filing for a bankruptcy is a consumer proposal (CP). In this blog, learn the pros and cons of consumer proposals, and determine whether it’s the right choice for you. 

What is a Consumer Proposal?

A consumer proposal is a legal process that allows you to negotiate with your creditors to pay back a portion of your debt over a set period of time. In Canada, consumer proposals are administered by a licensed insolvency trustee, which CreditLift is not a licensed insolvency trustee but you have a right to have someone guide you and assist you for what’s in your best interest. Once you file a consumer proposal, your creditors are prevented from pursuing legal action against you, and you can work towards paying off your debts.

Credit Lift is not a Licensed Insolvency Trustee. Our role is to help you discover the options available to you to become debt free and stay debt free. 


Debt Reduction

One of the biggest benefits of a consumer proposal is that it allows you to reduce your debt. By negotiating with your creditors, you may be able to reduce your debt by up to 70% or more.

Protection from Creditors

When you file a consumer proposal, you are protected from legal action by your creditors. This means that they can’t garnish your wages or seize your assets.

Flexible Payment Plans

Consumer proposals allow for flexible payment plans, which can be tailored to your individual needs and financial situation. This can make it easier to manage your debts and stay on track with your payments.

You can begin the process of rebuilding credit while you’re in a proposal. You do not have to wait to be discharged to start rebuilding credit


Negative Impact on Credit Score

Filing a CP has a negative impact on your credit score, which can make it more difficult to obtain credit in the near future. However, it is not permanent and credit is rebuildable. The impact is generally less severe than filing for bankruptcy.


There are fees associated with filing a CP even if it’s built into your repayment plan you still need to be aware that this is not a free process. If anyone says otherwise, they are not being honest and truthful and you need to get a second opinion elsewhere

Required Income

To be eligible for a CP, you must have a steady source of income. If you don’t have a regular income, you may not be able to qualify for this option.

Is a Consumer Proposal Right for You?

Consumer proposals can be a good option for those who are struggling with debt and are looking for a way to reduce their overall debt load. However, it’s important to consider all of the pros and cons before making a decision. If you’re considering a consumer proposal, it’s important to get professional help. CreditLift can help you discover the options available to you to become debt free and stay debt free.

Learn more about Consumer Proposals on the Canadian Government’s website.

To discover how CreditLift can help you get out of debt, reach out to us now. 

Related Posts


CreditLift founders are considered experts in their field and have been interviewed by both local & national news networks related to debt and financial literacy.