If you’re drowning in debt and considering a consumer proposal, you’re probably asking yourself one big question: will my consumer proposal be accepted? It’s completely normal to feel anxious about putting your finances in someone else’s hands, especially when you’re already stressed about money.
The good news is that consumer proposals in Canada have a very high acceptance rate. According to data from Licensed Insolvency Trustees across the country, the vast majority of consumer proposals are accepted by creditors — often on the first attempt. Let’s walk through exactly how the process works, what affects your chances, and what you can do to make your proposal as strong as possible.
What Is a Consumer Proposal?
A consumer proposal is a formal, legally binding agreement between you and your creditors. It’s filed through a Licensed Insolvency Trustee (LIT) — the only professionals authorized by the federal government to administer these agreements. Under a consumer proposal, you agree to repay a portion of your total unsecured debt over a period of up to five years, and your creditors agree to forgive the rest.
It’s an alternative to bankruptcy that lets you keep your assets, stop interest charges, and get a single affordable monthly payment. Consumer proposals are governed by the Bankruptcy and Insolvency Act, which means they have real legal teeth — once accepted, all your unsecured creditors are bound by the terms, even if some of them voted against it.
If you’re trying to understand the broader picture of consumer debt relief options in Canada, a consumer proposal is one of the most popular formal debt solutions available.
Consumer Proposal Acceptance Rates in Canada
Here’s something that might ease your mind: consumer proposals have a very high acceptance rate. Industry data from major insolvency firms like Hoyes Michalos shows that the vast majority of proposals are accepted — many without creditors even requesting a meeting to vote. When creditors don’t request a meeting within 45 days, the proposal is deemed accepted automatically.
There’s a simple reason for this high acceptance rate. Your LIT structures the proposal so that creditors receive more money than they would if you filed for bankruptcy. Since creditors are in the business of recovering as much money as possible, they usually prefer a reasonable proposal over the alternative of getting less through bankruptcy proceedings.
Pros of Filing a Consumer Proposal
Cons of Filing a Consumer Proposal
Who Should Consider a Consumer Proposal
- You have more than $10,000 in unsecured debt and can’t realistically pay it off within three years
- You’re employed or have steady income but your debt payments are unmanageable
- You want to avoid bankruptcy and protect assets like your home or vehicle
- You’re dealing with wage garnishments or collection calls that need to stop
- You’ve already tried credit counselling or a debt management plan, but it isn’t enough
Who Should Not File a Consumer Proposal
- Your debts are small enough to pay off with a budget adjustment or consolidation loan
- You have no income at all — you need some ability to make monthly payments
- Your debts exceed $250,000 (excluding mortgage) — you’d need a Division I proposal instead
- Most of your debts are secured (mortgage, car loan) since these aren’t covered
- You’ve recently experienced job loss and aren’t sure when income will return — it may be better to wait
How Creditors Vote on Your Proposal
Understanding how the voting works can help you feel more confident about the process. Once your LIT files the consumer proposal with the Office of the Superintendent of Bankruptcy, your creditors have 45 days to respond. Here’s what can happen:
No meeting requested — automatic acceptance
If no creditors holding at least 25% of the total dollar value of your proven claims request a meeting, the proposal is deemed accepted. This is actually the most common outcome. Many major creditors — banks, credit card companies — have internal policies that guide them to accept proposals that meet certain thresholds without bothering to call a meeting.
Meeting requested — creditors vote
If enough creditors request a meeting, a vote is held. For the proposal to pass, creditors representing a simple majority (more than 50%) of the dollar value of proven claims must vote in favour. Importantly, it’s the dollar amount that matters, not the number of individual creditors. So if you owe $40,000 to one creditor and $5,000 to three others, the large creditor’s vote carries the most weight.
Proposal rejected — you can amend and refile
According to the Bankruptcy and Insolvency Act provisions, if your proposal is rejected, you’re not out of options. Your LIT can negotiate with the dissenting creditors and file an amended proposal — often with a slightly higher repayment amount or longer term. In many cases, a revised offer is accepted on the second try.
Financial Example: What a Consumer Proposal Looks Like
Let’s look at a realistic example to show you what the numbers might look like:
In this scenario, your LIT might propose repaying $16,000 over 60 months — that’s just $267 per month. The remaining $24,000 would be legally forgiven. Creditors would likely accept this because in a bankruptcy scenario, they might only recover $8,000 to $10,000. The proposal gives them a better deal.
Steps to Strengthen Your Consumer Proposal
While most proposals are accepted, there are clear steps you can take to improve your chances even further:
- Book a free consultation with a Licensed Insolvency Trustee. An experienced LIT knows what creditors in your area typically accept. They’ll review your complete financial picture and tell you whether a consumer proposal makes sense for your situation. You can start with a free assessment here.
- Gather all your financial documents. Pull together recent pay stubs, bank statements, a list of all debts with account numbers, and a breakdown of your monthly expenses. The more complete and accurate your disclosure, the stronger your proposal will be.
- Be completely transparent about your finances. Creditors are more likely to accept a proposal when your LIT can show a clear, honest picture of your income, assets, and expenses. Hiding assets or income can lead to rejection — or worse, your proposal being annulled later.
- Offer creditors more than they’d get in bankruptcy. This is the golden rule. Your LIT will calculate what creditors would receive if you went bankrupt and make sure the proposal offers meaningfully more. A proposal that’s clearly better than the bankruptcy alternative rarely gets rejected.
- Consider a lump-sum sweetener if possible. If you have access to a one-time amount — say from a tax refund, family help, or RRSP withdrawal — adding a lump sum to the proposal can make it more attractive to creditors who prefer faster recovery.
- Don’t wait until you’re desperate. Filing before your situation becomes critical means you have more income and options to offer creditors. If you’ve already read about consumer proposal success stories, you’ll notice that many people wish they’d started sooner.
Ready to see if you qualify?
Frequently Asked Questions
What percentage of consumer proposals are accepted in Canada?
The vast majority of consumer proposals are accepted — industry data suggests acceptance rates well above 90%. Many proposals are deemed accepted automatically when no creditors request a meeting within the 45-day window. When a meeting is called, most proposals still pass on the first vote because the LIT has already structured the offer to be more favourable than what creditors would recover through bankruptcy.
What happens if my consumer proposal is rejected?
If creditors vote to reject your proposal, it doesn’t mean the process is over. Your Licensed Insolvency Trustee can negotiate with the creditors who voted against it and file an amended proposal with better terms — often a higher total repayment or extended timeline. Many rejected proposals are successfully revised and accepted on the second attempt. You also still have the option of filing for bankruptcy if needed, though most people prefer to try again with an amended offer first. For more details, read about other debt relief options available to you.
Can the CRA (Canada Revenue Agency) reject my consumer proposal?
The CRA participates in the voting process like any other unsecured creditor. Their vote is weighted by the dollar amount of tax debt you owe them. In practice, the CRA generally follows the same logic as other creditors: if the proposal offers them more than they’d collect through bankruptcy, they tend to accept. However, the CRA can be stricter if they suspect fraudulent tax filings or if the tax debt is very large relative to your other debts. Having a well-documented proposal with transparent financials is especially important when the CRA is a major creditor.
How long does it take for creditors to accept a consumer proposal?
After your Licensed Insolvency Trustee files the proposal, creditors have 45 days to either accept it or request a meeting to vote. If no meeting is requested, the proposal is automatically deemed accepted on day 46. If a meeting is called, it typically takes place within 21 days of the request. So in most cases, you’ll know whether your proposal is accepted within about six to ten weeks of filing. During this time, you’re already protected by the stay of proceedings — meaning collection calls and wage garnishments are stopped.
Does my credit score affect whether my consumer proposal will be accepted?
No, your credit score does not directly affect whether creditors accept or reject your proposal. Creditors make their decision based on the financial terms of the proposal — specifically, how much money they’ll recover compared to what they’d get if you filed for bankruptcy. Many people filing consumer proposals already have damaged credit from missed payments and collections, and that’s completely expected. What matters to creditors is the dollar amount you’re offering and your ability to make the payments. After completing your proposal, you can begin rebuilding your credit over time.
