If you live in Calgary and your debt feels heavier every month — minimum payments climbing, collection calls starting, maybe a wage garnishment letter sitting on the kitchen table — you are not alone, and you are not out of options. A consumer proposal is one of the most common formal debt-relief tools used by Albertans, and it can cut your unsecured debt significantly while protecting your home, your vehicle, and your paycheque.
This guide walks you through how a consumer proposal works in Calgary, AB in 2026: who qualifies, what it actually costs, the step-by-step filing process, and the trade-offs you should understand before signing anything. Everything here is based on the federal Bankruptcy and Insolvency Act and guidance from the Office of the Superintendent of Bankruptcy — the government body that regulates this process.
What is a consumer proposal?
A consumer proposal is a formal, legally binding offer you make to your unsecured creditors — credit card companies, banks, payday lenders, the Canada Revenue Agency, collection agencies — through a Licensed Insolvency Trustee (LIT). The trustee is a federally regulated debt professional licensed by the OSB, and they are the only person legally allowed to file one for you in Alberta or anywhere else in Canada.
The proposal lays out what you can realistically afford. Typically you offer to pay back a percentage of the total debt — often somewhere between 30% and 50%, depending on your income, assets, and what creditors would have received in a bankruptcy. Once the majority of creditors (by dollar value) approve it, the deal is binding on every unsecured creditor, even ones who voted no. Per the federal Bankruptcy and Insolvency Act, the proposal must be completed within five years.
From the moment your trustee files the paperwork with the OSB, a “stay of proceedings” kicks in. That means interest stops accruing on included debts, collection calls have to stop, and any wage garnishment in progress must be lifted. You replace a tangle of bills with a single fixed monthly payment to your trustee, who distributes it to your creditors. If you want to compare this against the alternative, our guide on bankruptcy vs. consumer proposal in Canada walks through the differences in detail.
Pros of filing a consumer proposal in Calgary
Major debt reduction
Most Albertans settle for a fraction of what they owe — commonly 30%–50%. The remaining balance is legally forgiven once you complete the proposal.
Interest stops cold
The day your proposal is filed, interest on included debts freezes at zero. Every dollar you pay goes toward principal, not finance charges.
You keep your assets
Unlike bankruptcy, a consumer proposal lets you keep your house, vehicle, RRSPs, and other property — provided you keep paying any secured loans.
Collection calls and garnishments end
The federal stay of proceedings stops creditor lawsuits, wage garnishments, and collection contact the moment your proposal is filed.
One fixed monthly payment
Instead of juggling cards, payday loans, and CRA balances, you make one predictable payment to your trustee for up to five years.
Legally binding on all creditors
If the majority approve, every unsecured creditor must accept the deal — even the ones who voted against it.
Cons and trade-offs to know
Credit score takes a hit
A consumer proposal shows on your credit report as an R7 rating and stays for three years after you complete payments, or six years from the filing date — whichever comes first.
It is a public record
Your filing is recorded in the OSB’s public bankruptcy database. Most people never look there, but it is technically searchable.
You must stick with payments
Miss three monthly payments and your proposal can be deemed annulled. Your old debts come back — with interest restored.
Not all debts are included
Student loans less than seven years old, court fines, alimony, child support, and secured debts like your mortgage are not erased by a proposal.
Two counselling sessions required
Federal rules require you to attend two financial counselling sessions during your proposal. Useful, but mandatory.
Longer than bankruptcy
A first-time bankruptcy can be discharged in nine months. A proposal usually runs 36–60 months — the trade-off for keeping your assets.
Who should consider a consumer proposal in Calgary
This is likely a strong fit if you:
- Owe between roughly $10,000 and $250,000 in unsecured debt (credit cards, lines of credit, payday loans, CRA tax debt, collections)
- Have steady employment income in Calgary or anywhere in Alberta
- Cannot realistically pay off the balance in five years even at zero interest
- Want to keep your house, vehicle, or RRSPs
- Are facing wage garnishment, lawsuits, or aggressive collection calls
- Have already tried (or ruled out) a debt consolidation loan and been declined
Who should probably not file a consumer proposal
This is probably the wrong tool if you:
- Have less than about $10,000 in unsecured debt — credit counselling or a debt management plan is usually cheaper and gentler on credit
- Could realistically clear the debt in 24 months by tightening your budget
- Have unsecured debt above $250,000 — you would need a Division I proposal, which is a different (more complex) process
- Have no stable income at all — your trustee will tell you the math does not work
- Have only secured debt (mortgage, car loan) — proposals do not erase secured debts
- Are temporarily strapped after a single setback. Our guide on managing debt after job loss covers shorter-term options first
A realistic Calgary example
Let’s walk through a typical scenario. Imagine a Calgary resident — call her Sarah — works full-time downtown, earns about $62,000 a year, and has accumulated $48,000 in unsecured debt across three credit cards, a personal line of credit, and a CRA balance from a side gig. Minimum payments are $1,420 a month and rising. Bankruptcy would force her to surrender tax refunds and could mean surplus income payments because she earns above the federal threshold. Here is how a consumer proposal could compare:
This is illustrative only — your actual numbers depend on your income, assets, household size, and what your creditors will accept. But it shows the underlying logic: a proposal trades a long, expensive minimum-payment treadmill for a fixed, interest-free repayment plan you can actually finish. You can read more outcomes in our collection of real Canadian consumer proposal success stories.
Step-by-step: how to file a consumer proposal in Calgary
Book a free consultation with a Licensed Insolvency Trustee
Find a trustee licensed in Alberta — you can search the OSB’s official Licensed Insolvency Trustee directory. The first meeting is free, confidential, and carries no obligation. The LIT will review your income, debts, assets, and monthly expenses to confirm whether a proposal makes sense for you.
Draft the proposal terms with your trustee
If a proposal fits, the trustee builds the offer: how much you will pay each month, for how many months, and what total amount goes to creditors. The math has to leave creditors better off than they would be in a bankruptcy — that is the legal threshold under the Bankruptcy and Insolvency Act.
File the proposal with the Office of the Superintendent of Bankruptcy
The trustee files Form 47 electronically with the OSB. The moment that filing happens, the federal stay of proceedings begins: interest stops, creditor lawsuits halt, and any wage garnishment must be lifted. You stop paying creditors directly.
Your creditors review and vote
Creditors get 45 days to accept, reject, or request changes. They vote by dollar value of debt — so the bigger creditors carry more weight. If creditors holding more than 50% of voting claims approve, the proposal is accepted. If no one objects, it is automatically deemed accepted.
Begin monthly payments and counselling
You start sending one fixed monthly payment to your trustee, who distributes it to creditors. You also attend two mandatory financial counselling sessions — these cover budgeting, credit, and the habits that help keep you out of debt afterward.
Receive your Certificate of Full Performance
Once you have made every payment and finished both counselling sessions, your trustee issues a Certificate of Full Performance. The remaining unsecured debt is legally discharged. From there, you focus on rebuilding credit — usually a secured card, a small reported loan, and time.
The bottom line
Ready to see if you qualify?
Frequently asked questions
How much does a consumer proposal cost in Calgary?
You do not pay your trustee separately. The trustee’s fees and expenses are paid out of the monthly payments you make under the proposal — they are baked into the deal at no extra cost to you. The amount you pay each month is set when the proposal is drafted and never changes for the life of the agreement, even if your income goes up.
Will a consumer proposal stop a wage garnishment in Alberta?
Yes. The moment your trustee files the proposal with the OSB, a federal stay of proceedings is automatically triggered. That stay legally requires the creditor to stop the garnishment, and it also halts collection calls, lawsuits, and any other unsecured collection action. Secured creditors, like a mortgage lender, can still enforce their security if you fall behind on those payments.
Will I lose my house or my vehicle?
Generally, no — and this is one of the biggest reasons people choose a proposal over bankruptcy. As long as you keep paying your secured loans (mortgage, car loan), the property is yours to keep. Equity in those assets is taken into account when the trustee designs the proposal, but the house or vehicle itself does not go to creditors the way certain assets can in a bankruptcy.
How long does a consumer proposal stay on my credit report?
An R7 rating shows on your credit report and remains for three years after you finish paying, or six years from the filing date — whichever comes first. That sounds long, but most people start rebuilding within months of completion using a secured card or a small reported loan. By the time the rating drops off, your credit is usually well on the way back.
What happens if my creditors reject the proposal?
Rejection is uncommon but possible. If the majority of creditors (by dollar value) vote no, your trustee can negotiate amended terms — often by adjusting the monthly payment or the term length — and re-submit. Importantly, a rejected proposal does not automatically push you into bankruptcy. You and your trustee can revise the offer, look at alternatives like debt consolidation or credit counselling, or, if it is the right fit, file for bankruptcy as a separate decision.
