What is a Consumer Proposal? - Bankruptcy and Credit Counselling St. John's | S.R Stack Skip to content

What is a Consumer Proposal?

Simplifying to one monthly payment and no more calls from creditors – learn more here about how a Consumer Proposal can help you.

What is a Consumer Proposal? 

If you listen to local radio or go online, in St. John’s or across Newfoundland and Labrador, you’re sure to have come across an ad for a Consumer Proposal from a Licensed Insolvency Trustee.

A Consumer Proposal is an offer to your creditors that has to be done through a Licensed Insolvency Trustee (“LIT or Trustee”) and is a formal, legally binding process. It usually consists of monthly payments which are made directly to the LIT who collects the money and then distributes it to your unsecured creditors – you don’t pay your credit cards, lines of credit etc any longer and are protected from their phone calls and collection attempts (your phone stops ringing from collection agents).

Your creditors get to vote on whether they will accept your proposal so the LIT will work with you to put together a reasonable offer. It cannot be for longer than 5 years and, if approved by the creditors, is an interest free amount that can be prepaid in part or in full at any time without penalty.

A Consumer Proposal might be right for you if you’re struggling with your debts and the total of what you owe, not counting mortgages on your principal residence, is less than $250,000. If your total, not counting mortgages on your principal residence, is more than $250,000 talk to the Trustee about whether a Division I Proposal or Bankruptcy would be right for you.

It is often possible to keep assets like your house or your vehicle during a Consumer Proposal your Trustee will help you understand how this could work.

In case you’re wondering, Licensed Insolvency Trustees are licensed by the Office of the Superintendent of Bankruptcy (the “OSB”) which is part of the Government of Canada. The OSB website has a lot more information on Consumer Proposals and the link is below.

If you want to discuss whether a Consumer Proposal can help you with your debt and help you get the fresh start you deserve, give me, Sean Stack, a call at 709-221-5500 or email me at sean@srtack.ca


Did You Know?


Many people who file for bankruptcy get to stay in their home.


In Newfoundland and Labrador, you can keep your RRSPs – even if you file for bankruptcy.


Many people who file for bankruptcy are able to keep their vehicle.


Most bankruptcies are NOT published in the newspaper.


Student loans can be included in a bankruptcy if they are more than seven (7) years old.


A consumer proposal is an alternative to bankruptcy that can only be filed with a licensed trustee in bankruptcy.


In NL, people ages 30 to 39 years old file for bankruptcy more than any other age group. [source]