If you live in New Brunswick and your unsecured debts are starting to feel impossible — minimum payments climbing, collection calls multiplying, sleep harder to come by — you have more options than you might think. A consumer proposal is one of the most widely used legal debt relief tools in Canada, and it works the same way in Moncton, Saint John, Fredericton, Bathurst, or anywhere else in the province.
This guide walks you through how a consumer proposal in New Brunswick works in 2026, what it costs, who it actually helps, and where it falls short. The goal isn’t to push you toward a proposal — it’s to help you understand it well enough to make a confident decision.
What is a consumer proposal?
A consumer proposal is a formal, legally binding process administered by a federally regulated Licensed Insolvency Trustee (LIT) under the federal Bankruptcy and Insolvency Act. According to the Office of the Superintendent of Bankruptcy, the LIT is the only professional in Canada who can file one in your name.
In practice, your trustee works with you to put together an offer to your unsecured creditors — typically asking them to accept a percentage of what’s owed, or a longer time to pay, or both. The full balance can be reduced significantly, and the term cannot exceed five years. To qualify, you need to be a Canadian resident, insolvent, and owe less than $250,000 in unsecured debt (your mortgage on your principal residence is not counted).
The same federal rules apply in every province, so a consumer proposal in New Brunswick follows the same structure as one in Ontario, Alberta, or Nova Scotia. What differs is mostly local: which trustees are nearby, your provincial cost of living, and which exemptions apply if you ever needed to compare it to bankruptcy.
The advantages
The downsides
Who it’s a fit for
A consumer proposal in New Brunswick may be the right path if you:
- Owe between roughly $10,000 and $250,000 in unsecured debt — credit cards, lines of credit, personal loans, payday loans, or accounts in collections.
- Have steady income but can’t realistically clear the balance through minimum payments.
- Want to keep your home, vehicle, or RRSPs and avoid filing for bankruptcy.
- Need the collection calls, lawsuits, or wage garnishments to stop.
- Have already tried debt consolidation or credit counselling and they aren’t enough.
Who should look elsewhere
A consumer proposal probably isn’t the right tool if you:
- Owe less than about $10,000 — a structured budget or a debt management plan through credit counselling may handle it.
- Have most of your debt in secured loans, recent student loans, child support, or CRA tax debt that won’t qualify for inclusion.
- Have no steady income at all — without a way to make payments, the proposal can’t work, and bankruptcy may make more sense.
- Owe more than $250,000 unsecured — you’d need a Division I proposal instead, which is a different, more complex process.
- Could realistically pay everything off in 12–24 months on your own with a tighter budget.
A real-world example
Imagine someone in Moncton, New Brunswick, with $42,000 of unsecured debt across credit cards, a line of credit, and a couple of personal loans, paying high interest and falling behind. After meeting with an LIT, they file a consumer proposal offering to repay a portion over 60 months.
This is illustrative, not a quote — the actual percentage is set based on income, expenses, assets, and what creditors are likely to accept. Some proposals settle for less; others for more. Real Canadian success stories can give you a sense of what outcomes look like.
How to file a consumer proposal in New Brunswick
The process below follows the official OSB consumer proposal procedure. It is the same in every province, including New Brunswick.
- Book a free consultation with a Licensed Insolvency Trustee. The first meeting is usually no-cost and confidential. The LIT reviews your income, expenses, assets, and debts and walks you through every option — not just a proposal.
- Confirm a consumer proposal is the right fit. If a budget tweak, consolidation loan, or credit counselling plan would solve the problem, an honest LIT will say so. A proposal is reserved for situations where the math actually requires it.
- Build your offer. The trustee helps you draft a realistic monthly payment over up to 60 months (or a lump sum) — usually structured to give creditors more than they’d receive in a bankruptcy.
- File the proposal with the OSB. Filing is electronic. The moment it’s filed, the stay of proceedings kicks in: interest stops, collection calls stop, and most wage garnishments are halted.
- Wait for the creditor vote. Creditors have 45 days to vote. If creditors holding a majority of the proven dollar value approve (or no one objects), the proposal is accepted. Most consumer proposals are accepted.
- Make your monthly payments. You make one predictable payment to the trustee, who distributes the funds. You can pay early with no penalty.
- Attend two financial counselling sessions. These are required by law and cover budgeting, credit, and avoiding future debt problems.
- Receive your Certificate of Full Performance. Once the final payment is made, you’re legally released from the included debts and the proposal closes.
Ready to see if you qualify?
Frequently asked questions
Are consumer proposals different in New Brunswick than in other provinces?
The legal framework is federal, so the rules are the same in New Brunswick as in Ontario, Quebec, BC, or anywhere else in Canada. The eligibility limits, the 45-day creditor vote, the five-year maximum term, and the credit reporting impact don’t change by province. What does change is the local trustee you’ll meet with, your provincial cost of living (which affects what payment is realistic), and the provincial exemptions that would apply if a bankruptcy were used as a comparison. Picking a Licensed Insolvency Trustee with an office in your area — Moncton, Saint John, Fredericton, Bathurst, or elsewhere — usually just makes the meetings more convenient.
How long does a consumer proposal take from start to finish?
Filing itself is fast — once you and your LIT have prepared the documents, the proposal is filed electronically and protection from creditors begins immediately. Creditors then have 45 days to vote, plus a 15-day court approval window, so it’s usually about 60 days from filing to formal acceptance. The repayment term itself can run up to five years, but you can pay it off early at any time without a penalty. Many people aim to finish in 36–48 months once their budget stabilizes and they’ve completed the two required counselling sessions.
Will a consumer proposal stop wage garnishment in New Brunswick?
In most cases, yes. As soon as the proposal is filed with the OSB, an automatic stay of proceedings takes effect. That stay halts most collection actions, including ordinary unsecured wage garnishments and pending lawsuits. There are exceptions — garnishments for child support, alimony, and some court-ordered amounts are not stopped because those debts can’t be included in a proposal. If you’re already being garnished and need it to stop quickly, that’s worth raising in your first LIT consultation, since the trustee can often time the filing to deliver near-immediate relief.
What happens to my credit score during and after a consumer proposal?
Your credit report will reflect an R7 rating (or equivalent “proposal” notation) while you’re in the proposal, and that notation typically remains for three years after you complete it — or six years from the date you filed, whichever comes first. That sounds bad, but in many cases people who file a proposal already have damaged credit from missed payments and high utilization. The good news is that you can start rebuilding immediately by paying on time, using a secured credit card, and keeping balances low. Many people see meaningful score recovery within 12–24 months of completion.
Can I include CRA tax debt in a consumer proposal?
Yes, in most cases. Personal income tax debt
After 20 years of structuring multi-million dollar corporate debt facilities and corporate turnarounds in investment banking, Marcus now leads Canadian Debt Relief to apply those exact same balance-sheet optimization frameworks to Canadian household debt.
