Consumer Proposal Process in Saskatoon

The City of Saskatoon, Saskatchewan provides an endless array of excitement to partake in. You may be enjoying the wonders of the Western Development Museum or tackling the trails of the Beaver Creek Conservation Area. However, the pleasures of your day-to-day life can be overwhelmed by the struggles of your financial debt. Experiencing any financial difficulty can be complicated and taxing. No matter how hard you try, managing your debts may seem like a no-win scenario. Consider looking into a consumer proposal in Saskatoon. It’s a favourable debt relief alternative that has grown more popular as people have experienced positive results.


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 a Consumer Proposal

There are advantages and disadvantages involved with this debt help alternative, such as:


      • Significantly decreases the amount of debt owed. 
      • May be a better debt solution compared to others, such as debt consolidation.
      • You won’t have to declare bankruptcy.
      • You repay what you can afford. 
      • If you can finish your consumer proposal payments early, you can get out of a consumer proposal as soon as your final payment is made.
      • Entering a proposal can freeze the interest on the amount of debt you have.


      • Your proposal will become part of the public record. 
      • Creditors can reject your proposal. 
      • Missing three or more payments may result in you having to file for bankruptcy instead.
      • Not all of your debts are included, for example you will still need to continue payments on secured debts such as a car payment.
      • It will impact your credit history and rating.

How Does a Consumer Proposal Affect My Credit?

When you file a consumer proposal, it will show on your credit report and affect your credit rating. This means anyone that checks your credit report will see that you have entered into a consumer proposal. Once your proposal payments are finished, your credit rating will show as an R7, indicating that you had used a Consumer Proposal process to pay your creditors through a third party (your Trustee). 

Any payments made outside your consumer proposal, such as a car loan, will get reported separately. If you can keep up with your monthly proposal payments and your secured debts, you can start rebuilding your credit again.

Avoid Getting Ripped Off

You must always remember that only a Licensed Insolvency Trustee is legally able to file consumer proposals. As of late, many for-profit debt consultant companies and credit counsellors are taking advantage of those with debt problems. These companies will advertise that they offer a consumer proposal alternative and charge you numerous up-front fees. 

The money used to repay your creditors during a proposal should only go through your LIT. The law states that LITs are the only ones that can provide these services. 

Your debts can make your life difficult. Begin to make the change. Look into filing a consumer proposal to clear your debts and restore your finances. You can make an appointment with us today for a free consultation to go over all your options.


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.