What is a Consumer Proposal?

Consumer proposals are an arrangement that’s negotiated with your creditors or lenders. This is an alternative to personal bankruptcy. It’s a legally binding agreement that provides some level of protection from aggressive debt collectors and arrange for some partial repayment for your total unsecured debt that you owe.

When filing a Consumer proposal in Winnipeg, you agree to pay the portion of the balance you’ve agreed to pay back. And your creditors will agree to forgive the rest of the balance. And in this guide, we’ll help you find out how they can assist you in getting your finances back to normal.

So let’s get started!

Benefits of a Consumer Proposal

One main benefit is that your assets are not at risk and they won’t be surrendered to administrators as due to your proposal agreement. Also, once your consumer proposal is accepted, you won’t have to make more payments if your income increases.

The negative effects on your credit score isn’t as severe as bankruptcy. Your consumer proposal will have an R7 rating, while personal bankruptcy will have an R9 rating (this is also the lowest rating possible.), and is why you should look for alternative options before you start filing for bankruptcy.

If you do file for a consumer proposal, you’ll have a proposition to help repay a part of your debt. The sense of control you’ll regain will give a dramatic improvement to your self-esteem.

How Do I Qualify for a Consumer Proposal?

Here are some requirements:

  • Be an individual (Businesses can’t file consumer proposals)
  • Have your total debt under $250,000 (excluding your total mortgage based on your principal residence)
  • Have monthly income from a stable source, to ensure that you’ll be able to make the payments within each month.

Have no proposal proceedings that are open:

  • The trustee that was handling your previous filing might have been discharged. You are unable to have two filings open at once. Examples of this are a Proposal to Creditors and a Notice of Intention.
  • If you have an annual consumer proposal, you cannot file for another consumer proposal until the previous one has been paid in full or extinguished due to bankruptcy.

Can I File With Another Person?

Some of your debts can be shared with another person. That means, you’re both responsible due to guaranteeing a loan or by co-signing. Usually, this occurs when a couple is living together.

One person can file a consumer proposal together via joint filing. To file a joint proposal:

  • When two people start to file together (i.e a husband and wife), their total debts can’t total up to $500,000 instead of the standard $250,000 limit for single applicants.

Does Bankruptcy Prevent Me From Filing a Consumer Proposal?

Consumer proposals and bankruptcy vary from case to case.  It must be assessed by the Licence Insolvency Trustee(LIT) administering the bankruptcy.

In Winnipeg, it’s possible to file a consumer proposal if you meet the requirements. By doing so, you can find it easier to get your debt repaid and overall credit/financial profile back to good standing. By planning out your proposal, you’ll increase the chances of getting approved and getting the financial assistance you need.

Please note this article is not legal advice. If you are strongly considering a consumer proposal speak to a lawyer who specializes in proposals. Debtconsolidationwinnipeg.ca does not have LITs employed.


  1. https://www.bankruptcy-canada.ca/what-is-a-consumer-proposal
  2. https://www.debt.ca/consumer-proposal/quebec
  3. https://www.nomoredebts.org/debt-help/consumer-proposal-canada.html


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