If you’re feeling overwhelmed by debt, you’re not alone, and you’re not without options. A consumer proposal is one of the most effective, legally backed ways to regain control of your finances while protecting your assets. But what does the process actually look like?
Think of this as your roadmap. Just like planning a big trip, taking things one step at a time can help you feel more confident, informed, and in control. Here’s what to expect if you choose to move forward with a consumer proposal.
Step 1: Meet with a Licensed Insolvency Trustee (LIT)
Your first step is simply having a conversation. A Licensed Insolvency Trustee is the only professional in Canada legally authorized to file a consumer proposal on your behalf.
This initial meeting is all about understanding your financial situation: your income, your debts, your monthly expenses, and your goals. From there, your LIT will walk you through all your options (including ones you may not have considered) and help you decide if a consumer proposal is right for you.
Step 2: Create Your Proposal
If a consumer proposal is the right fit, the next step is to work with your LIT to draft the offer to your creditors. This proposal outlines how much of your debt you can reasonably repay, usually a portion of the total amount owed over a set period (up to five years).
A typical proposal includes:
- A summary of the total debt you owe
- The portion you’re offering to repay
- A proposed monthly payment amount and timeline
- An overview of your income and living expenses
- Supporting documents to help creditors evaluate your offer
The goal is a proposal that makes sense for both you and your creditors.
Step 3: Submit the Proposal and Stop Collection Action
Once your proposal is filed, the next step is a legal stay of proceedings going into effect. This means creditors must stop all collection efforts.
You’re immediately protected from:
- Collection calls
- Wage garnishments
- Legal action related to unsecured debts
- Further interest on most unsecured balances
This breathing room often brings the first real sense of relief in the process.
Step 4: Creditor Review and Vote
Your creditors have 45 days to review the proposal. If a majority (by dollar value of debt) vote to accept it, the proposal becomes legally binding for all unsecured creditors.
In many cases, creditors are open to negotiation, as they know that a fair proposal is often a better outcome than bankruptcy. Your Trustee will represent you in these discussions, so you never have to negotiate directly.
Step 5: Make Payments and Complete the Program
Once your proposal is accepted, you’ll begin making your monthly payments. These payments are:
- Fixed and interest-free
- Consolidated into one manageable monthly amount
- Made over a period of up to five years
During this time, you’ll also complete two financial counselling sessions focused on:
- Building healthy money habits
- Managing credit responsibly
- Strengthening your long-term financial confidence
Step 6: Receive Your Certificate of Full Performance
Once you’ve completed all the terms of your proposal, your remaining eligible debts are legally forgiven. You’ll receive a Certificate of Full Performance and, with it, a fresh financial start.
That’s more than a piece of paper. It’s peace of mind, a sense of freedom, and the chance to move forward without the weight of unmanageable debt.
The Faber Advantage
At Faber, we understand that debt can feel isolating. But it doesn’t have to be. Our team of compassionate Licensed Insolvency Trustees is here to guide you every step of the way, from that very first conversation to your final payment and beyond.
If you’re ready to explore whether a consumer proposal is right for you, we’re ready to help with clarity, respect, and solutions that work for your specific situation.
Book a free consultation today and take the first step toward a stronger financial future.
