Consumer Proposal Process in Brandon

Living in Brandon, Manitoba offers residents the privilege of partaking in exciting activities, such as the Riverbank Discovery Centre. However, adventuring through the serene greenery can prove difficult when your debt problems are all you’re thinking about. Debt can be a debilitating thing to deal with on your own. Luckily, there are ways for you to improve your overall financial situation. A consumer proposal has become one of the most popular options for those in Brandon seeking debt relief.

What Is a Consumer Proposal?

A consumer proposal provides debt solutions to those struggling with their finances. Unlike other options, such as debt consolidation, a consumer proposal is a binding legal agreement between you and your creditors. Only Licensed Insolvency Trustees are legally allowed to create and file a consumer proposal for you. 

During the process, a Licensed Insolvency Trustee will work with you to make an offer to pay your creditors a portion of the debts owed to them. Trustees can also arrange for you to keep your assets, such as GST credits, RRSPs, and tax refunds. However, your creditors can vote on whether they accept the proposal. Once accepted, you will repay your creditors the amount agreed upon, and they will be unable to make collection calls or harass you. 

To complete a consumer proposal, you must prepare to make a monthly payment straight to your Trustee. The Trustee will then distribute the money toward your creditors. Once you have officially repaid your creditors as agreed in your proposal, they will eliminate the rest of the debt owed. 

When you file a consumer proposal, there are some responsibilities you will have to undertake: 

  • Provide the Licensed Insolvency Trustee with a detailed list of your assets, such as properties or debts. 
  • If requested, attend the meeting of creditors. 
  • Begin making monthly payments to your LIT. 
  • Adhere to the conditions of your consumer proposal. 
  • Attend two credit counselling sessions either in-person or through video conferencing.
  • Report any changes in your financial situation to your Licensed Insolvency trustee. 

If you don’t follow the terms of the agreement, you will forfeit the debt relief benefits and protection of your proposal. If your creditors reject your consumer proposal, your Licensed Insolvency Trustee may recommend other debt solutions, such as declaring bankruptcy.

The Advantages & Disadvantages of Consumer Proposals

There are several advantages and disadvantages associated with a consumer proposal:


  • A consumer proposal can decrease the amount of debt you owe. 
  • You won’t have to declare bankruptcy. 
  • It may be the best option compared to other debt solutions, such as debt consolidation. 
  • You pay back what you can afford. 
  • If you complete your proposal payments sooner, you can finish your consumer proposal faster than five years.
  • It can freeze the interest on your debt.


  • Your proposal will become part of a public record. 
  • The consumer proposal has the risk of being rejected. 
  • Missing three or more payments may mean you have to file for bankruptcy.
  • Not all debts are included, such as secured debts.
  • It will affect your credit.

      How Does a Consumer Proposal Affect My Credit?

      Filing a consumer proposal will appear on your credit report and affect your credit rating. This means anyone looking at your credit report will see that you entered into a consumer proposal. In addition, once you finish making your proposal payments, your credit rating will show as an R7, which indicates that you have used a proposal process to pay your creditors through a Licensed Insolvency Trustee. 

      However, if you’re making payments outside of your consumer proposal, such as a car loan, those will be reported separately. If you can maintain a good payment history on your consumer proposal and any secured debts you have, you can start rebuilding your credit along the way.

      Avoid Getting Ripped Off

      There are a growing number of companies and credit counsellors that are trying to take advantage of clients that are searching for debt help. Many of these companies promote consumer proposals as part of the services they offer and bombard you with confusing information.

      Remember that only a Licensed Insolvency Trustee can legally handle consumer proposals. Never hand money over to anyone for a consumer proposal unless they’re a LIT. The law states that only Trustees are allowed to get paid for this service. 

      Dealing with debt is no easy task. A consumer proposal is a supportive option for those in Brandon, Manitoba looking for assistance with their financial debt. For more information about our services, make an appointment for a free consultation today. We have the knowledge and resources to provide you with the debt help options you require.


      What Happens When You File a Consumer Proposal?

      Your Licensed Insolvency Trustee will file the proposal with the Office of the Superintendent of Bankruptcy (OSB). After filing, any payments you have to make with your creditors will be halted. If there are any legal actions relating to the debt you may be facing, they will be stopped as well.

      A report will be submitted to the creditors, which outlines your situation and the cause of your debt problems. The report will include your LIT’s opinion on whether the proposal should be accepted.

      How Much Debt Do You Need for a Consumer Proposal?

      To file for a consumer proposal, you must owe at least $1,000 in unsecured debt to qualify. It’s important to know how much you have in total debt. To qualify as a single individual, the maximum debt that you can have is $250,000. As for married couples, you can owe up to $500,000 together.

      Do Most Consumer Proposals Get Accepted?

      When a proposal is filed, your creditors will have 45 days to vote on whether they accept or reject the consumer proposal. If there’s no meeting of creditors requested, that means that the proposal will be accepted by the creditors and binds all of those creditors under the consumer proposal terms, even those that didn’t vote before the deadline.

      For a meeting of creditors to be held, creditors owed at least 25% of the total value of the proven claims, as filed on the 45th day after the initial proposal was filed, must request a meeting. LITs can also be directed by the Office of the Superintendent of Bankruptcy (OSB) to call for a meeting of creditors during the same time frame. A meeting of creditors must be held within 21 days after being called. The creditors will then vote to either accept or reject the proposal, or request that you make a change to the proposal terms. If the majority of the creditors vote to accept the proposal either as it was originally filed, or following a change to the terms, then the proposal will have been approved.

      If the consumer proposal was not accepted, you may also have to consider other debt consolidation options or declare bankruptcy.

      What Is the Difference Between Consumer Proposal & Bankruptcy?

      A consumer proposal is a binding agreement made between you and your creditors. This proposal is administered by an LIT, who helps negotiate the terms of your debt repayment. The legally binding agreement protects you from debt collectors and can freeze the accumulated interest.

      Bankruptcy is a legal process that relieves you of the debts you’re facing in your financial situation. You can get a free consultation with an LIT to go over your debt-relief options; in this appointment, a Trustee will discuss if bankruptcy might be your best option. Filing for bankruptcy will show on your credit history for six years following your discharge from the process, but the process of bankruptcy can be accomplished in as little as nine months.

      There are some differences involved between these two alternatives, such as:

      • With bankruptcy, you will have to submit monthly reports on your income and expenses. Consumer proposals don’t require any reporting duties.
      • Consumer proposals allow you to keep all of your assets, while bankruptcy may require you to surrender any non-exempt assets.
      • The duration varies for these two debt solutions, with consumer proposals taking up to 5 years and bankruptcy taking as little as 9 months.
      • The cost associated with consumer proposals is covered as you make your monthly payments. If you’ve declared bankruptcy, the cost involved will depend on your average monthly income, and is calculated specifically for each case.
      • Consumer proposals will show for no longer than 6 years on your credit score (sometimes less), where bankruptcy can remain on your history for 6-7 years.

      Will a Consumer Proposal Affect My Credit Rating?

      If you’ve filed a consumer proposal, it will show on your credit report. The proposal will be removed after three years from the date you have completed the proposal or six years from the date it was filed, whichever comes first.

      What Happens If You Miss Payments on a Consumer Proposal?

      Consumer proposals allow you to make monthly payments. If you were to miss three payments, or your payment is three months past due, the proposal will be annulled. When annulled, the agreement made on paying your debts will cease, allowing your lenders to once again be able to collect the money you owe them.

      What Happens When the Consumer Proposal Is Satisfied?

      When the conditions involved in your consumer proposal are satisfied, you will be released from the debts included in the proposal. You won’t be required to pay anything further on your debts. You will then receive a certificate of full performance.

      Seeking debt relief can be a difficult task, especially if those debts are weighing you down. No matter how hard of a struggle it can be, we assure you that there are debt solutions available to assist you. Make an appointment for a free consultation today, and we can see if a consumer proposal is the right option for you.