Understanding How Long a Consumer Proposal Takes in Canada: Timeline, Steps, and What to Expect

Managing debt is stressful, but knowing exactly how long a consumer proposal takes can reduce uncertainty and help you plan with confidence. This guide explains the full timeline—from your first conversation with a Licensed Insolvency Trustee (LIT) to receiving your Certificate of Full Performance—plus the factors that may speed up or slow down your journey.

Why understanding the timeline matters

When you’re weighing a consumer proposal, timing impacts everything: your cash flow, credit recovery plans, and household budgeting. Understanding how long each stage typically takes makes it easier to prepare, reduce anxiety, and avoid surprises.

• It clarifies when collection calls and legal actions stop.
• It lets you estimate how long you’ll be making fixed payments.
• It helps you plan milestones like rebuilding credit or applying for new housing.

Below, you’ll find realistic ranges and examples based on common Canadian experiences. For a complementary deep dive, see our detailed guide to consumer proposal timelines.

What is a consumer proposal?

A consumer proposal is a legally binding agreement under Canada’s Bankruptcy and Insolvency Act (BIA) that allows you to settle unsecured debts for less than you owe and repay over time, typically with fixed, interest-free monthly payments. It must be administered by a Licensed Insolvency Trustee (LIT). Once filed, a stay of proceedings halts most collection and legal actions.

To learn more about the federal framework and oversight, refer to information provided on Canada.ca (Government of Canada). This explainer uses plain language to help you map the process end-to-end.

The typical consumer proposal timeline, step-by-step

Every proposal is tailored to your situation, but most follow this pattern.

1) Initial consultation and preparation (about 1–2 weeks)

Your first meeting with an LIT often lasts 45–60 minutes. You’ll review your income, expenses, debts, and assets, and discuss alternatives. If a proposal is suitable, the trustee drafts the terms and gathers supporting documents. Preparation usually takes a few days to two weeks depending on how quickly documentation is provided.

• What helps: having pay stubs, tax returns, creditor statements, bank statements, and a list of assets ready.
• What slows it down: missing documents, complex business or tax debts, or waiting on creditor account details.

2) Filing the proposal with the OSB (1–3 days)

Once prepared, the LIT files your consumer proposal with the Office of the Superintendent of Bankruptcy (OSB). Filing triggers the legal stay of proceedings, which generally stops wage garnishments, collection calls, and most lawsuits. According to federal guidance via Canada.ca, the stay is a core protection embedded in the BIA.

• Immediate impact: most unsecured creditors must cease collection activity.
• Next steps: you begin making payments as set out in your proposal.

3) Creditor review and vote (up to 45 days)

Creditors have 45 days to review, request a meeting, and vote to accept or reject. A proposal is accepted if a majority by dollar value supports it. In practice, many proposals are approved without changes; some may require adjustments (for example, a slightly higher total or extended term).

For context on voting behaviour, see national insights on consumer proposal acceptance rates in Canada.

4) Approval and required counselling sessions

Once a proposal is approved by creditors and deemed binding by the court, you’ll complete two mandatory financial counselling sessions (typically within the first six months and later in the process). These sessions help you build stronger budgeting, credit, and savings habits so you convert debt relief into lasting stability.

5) Payment period (commonly 36–60 months; can be shorter)

Most proposals run three to five years, but you can finish faster. Payments are fixed and generally interest-free under the proposal terms, which stabilizes your monthly budget. If your income rises or you receive a windfall (for example, a tax refund or bonus), lump-sum payments can shorten the timeline.

• Standard range: 36–60 months.
• Faster completions: 18–30 months with extra payments or a partial lump sum.
• Pause and flexibility: discuss any income changes with your LIT early—adjustments may be possible.

6) Completion and Certificate of Full Performance

After all payments and counselling sessions are complete, your LIT issues a Certificate of Full Performance. Credit bureaus typically remove the proposal from your file about three years after completion (timelines can vary by bureau and province). Many Canadians find they can begin rebuilding credit before the item drops off by using secured products and practising strong credit hygiene.

What can shorten or extend your consumer proposal?

Not all proposals follow the same pace. The factors below can influence how long yours lasts.

• Completeness of documentation: Faster prep and filing when your paperwork is ready.
• Creditor complexity: Multiple creditors, disputed balances, or tax debts can require extra coordination.
• Budget realism: If initial payments are too tight, amendments may be needed later, potentially extending the term.
• Income changes: Bonuses, tax refunds, or side income can be used to make lump-sum payments and finish early.
• Missed payments: Falling behind can lead to proposal amendments or, in worst cases, annulment—adding time and stress.

Macroeconomic conditions also matter. Debt affordability can shift with interest rates, inflation, or employment trends. For current Canadian context on household debt and relief options, see market guidance in our 2025 mid-year debt relief trends and refer to broad data from Statistics Canada.

Realistic timeline examples

Example A: Steady income with credit card and line-of-credit balances

Profile: $45,000 unsecured debt, stable employment, no tax arrears. Proposal offers $18,000 over 48 months (~$375/month).

• Prep and filing: 2 weeks.
• Review and acceptance: 30–40 days.
• Payments: 48 months, with optional top-ups using annual tax refunds.
• Total duration: 4 years, potentially 3 years if making lump-sum payments each spring.

Example B: Income disruption and variable cash flow

Profile: $32,000 unsecured debt, recent job loss, new role found after two months. Proposal offers $12,000 over 60 months (~$200/month) to keep payments affordable during the transition.

• Prep and filing: 3 weeks due to employment verification.
• Review and acceptance: Full 45 days (one creditor requested minor changes).
• Payments: 60 months, later accelerated after income stabilises.
• Total duration: 5 years if paying the regular schedule; shorter if using bonuses or overtime to make extra payments.

If job loss or reduced hours are part of your story, you may also benefit from the guidance in our resource on debt management after job loss in Canada and employment supports described by Employment and Social Development Canada.

How to responsibly speed up your proposal timeline

Finishing early is not only possible—it’s common when you take advantage of predictable opportunities.

• Use windfalls wisely: Allocate tax refunds, overtime, or bonuses to lump-sum payments.
• Automate payments: Avoid missed due dates with automatic transfers and calendar reminders.
• Budget for stability: Build a small emergency buffer to prevent disruptions.
• Consider a settlement lump sum: If family support or savings allow, ask your LIT about offering a one-time payment to close the proposal sooner.
• Monitor affordability: If your budget changes, proactively discuss adjustments with your LIT before issues arise.

Interest rates can affect your broader finances and the attractiveness of alternatives. For context around rates and consumer proposal considerations, review our expert guide to consumer proposal interest-related factors.

How proposal timelines compare to other options

Consumer proposals aren’t the only path to relief. Understanding how long alternatives take helps you choose confidently.

• Bankruptcy: First-time bankruptcies often discharge in 9–21 months depending on income and surplus income obligations. However, asset implications and reporting differ from proposals. See our complete 2025 guide comparing bankruptcy vs consumer proposals.
• Debt consolidation loan: A new loan combines debts into one payment. Timelines depend on loan terms (often 3–7 years), interest rates, and approval criteria. Learn more in our guide to debt consolidation benefits, risks, and steps.

Each option has trade-offs. A proposal offers legal protections and predictable payments without ongoing interest under the proposal terms. Consolidation can be faster to set up but depends on your credit profile and may carry interest costs. Bankruptcy can be shorter but affects assets and reporting differently.

What happens to your credit file and life after completion

During a proposal, your credit file will reflect the arrangement, and new credit may be limited. After completion:

• Credit bureaus typically remove the proposal around three years after completion (timing can vary).
• You can rebuild credit earlier using secured credit cards, small installment accounts, low utilisation, and on-time payments.
• Responsible budgeting and savings habits developed during counselling sessions help you avoid future debt traps.

For a clear look at credit impacts and recovery strategies, explore how consumer proposals affect your credit score and future opportunities.

Key takeaways: understanding how long a consumer proposal takes

• End-to-end timeline: From your first consultation to completion, expect roughly 3–5 years for most proposals, with the option to finish faster.
• Fast early stages: Preparation and filing typically take 1–3 weeks; creditor review lasts up to 45 days.
• Payment phase is flexible: Fixed payments are usually interest-free under proposal terms. Lump sums can reduce the duration.
• Legal protection matters: The stay of proceedings starts at filing and provides important breathing room.
• Credit recovery begins sooner than you think: Many Canadians start rebuilding before the proposal drops off their file.

Timelines vary by situation and province, and official processes are overseen federally. For broader background on insolvency administration, consult the Government of Canada via Canada.ca, and use national data sources like Statistics Canada for trends affecting household debt and recovery. If you need a structured summary of stages and typical duration, our companion article on how long a consumer proposal takes provides a concise checklist of each step.

Ultimately, the strongest results come from a realistic budget, timely documents, steady payments, and using windfalls to accelerate your finish line. With clarity on the timeline, you can move through the process confidently and start planning your life after debt.