If your credit cards, payday loans, or collection calls have started to feel bigger than your paycheque, you are not alone in Winnipeg. Manitobans carry some of the highest non-mortgage debt loads in the country, and a lot of people end up Googling things like “consumer proposal Winnipeg” at 11 p.m. when sleep is not coming. The good news is that a consumer proposal in Winnipeg is a real, legal way to settle your unsecured debts for less than you owe, keep your home and car, and stop the calls — without filing bankruptcy.
This guide walks through what a consumer proposal is, how the process actually works in Manitoba, what it costs, who it’s a good fit for, and who should look at other options first. The aim is to help you make a calm, informed choice — not push you into anything.
What Is a Consumer Proposal in Winnipeg?
A consumer proposal is a formal, legally binding offer to your unsecured creditors — credit card companies, banks, payday lenders, collection agencies, even the Canada Revenue Agency in many cases — to pay back a portion of what you owe over a set period of time. It is governed by the federal Bankruptcy and Insolvency Act, which means the same rules apply in Winnipeg, Brandon, and across Manitoba as they do anywhere else in Canada.
Only a Licensed Insolvency Trustee (LIT) — a federally licensed professional regulated by the Office of the Superintendent of Bankruptcy Canada (OSB) — can legally file and administer your proposal. According to the OSB, a consumer proposal is available to people whose total unsecured debts (excluding their mortgage) are less than $250,000, and the term cannot exceed five years. Be wary of “debt relief” companies that charge fees on top of trustee fees — non-profit credit counsellors in Manitoba warn that this is one of the most common ways consumers get overcharged.
Once your proposal is filed with the OSB, an automatic stay of proceedings kicks in. That means wage garnishments stop, lawsuits pause, and collection agencies have to leave you alone. Your creditors then have 45 days to vote on the proposal. If creditors holding the majority of the dollar value of your debt accept it (or simply don’t object), it becomes binding on everyone — including the ones who voted no. You can read the federal step-by-step on the OSB’s consumer proposal page.
Pros of a Consumer Proposal
Pay back less than you owe
Most accepted proposals in Manitoba settle for somewhere between 30% and 50% of the original debt, with no interest added.
Keep your assets
Unlike bankruptcy, a consumer proposal usually lets you keep your house, your car, your RRSPs, and your tax refunds.
Stops collection calls and garnishments
The moment your proposal is filed, creditors and collection agencies must legally stop contacting you, and any wage garnishment ends.
One predictable monthly payment
Instead of juggling six creditors, you make one fixed payment to your trustee for up to five years.
Less severe than bankruptcy
You don’t lose assets, you don’t have to surrender tax refunds, and the credit hit, while real, is usually shorter.
Cons of a Consumer Proposal
It hurts your credit score
Your credit reports will show an R7 rating on each included account, and the proposal stays on file for three years after you complete it (or six years from filing, whichever comes first).
You’re locked in for years
Most proposals last the full five years. If your situation changes mid-way, you can amend it — but you cannot just walk away.
Public record
Consumer proposals are filed with the OSB and appear on a federally searchable public registry.
Some debts cannot be included
Secured debts (like your mortgage and car loan), recent student loans, court fines, and child or spousal support are not eliminated.
Creditors can vote no
If a single creditor holds more than 50% of your debt and refuses, the proposal can fail — though your trustee will typically negotiate to avoid this.
Who Should Consider a Consumer Proposal in Winnipeg
- You owe between roughly $10,000 and $250,000 in unsecured debt (credit cards, lines of credit, payday loans, tax debt, old collections).
- You have steady income — a job, pension, or self-employment income — that can support a fixed monthly payment.
- You want to keep your house, your vehicle, or your RRSPs.
- You’ve already tried a balance-transfer card or a consolidation loan and either got denied or can’t keep up.
- Wage garnishment, CRA collections, or constant calls from collection agencies are wearing you down.
- A debt management plan through a non-profit credit counsellor would still leave you paying back 100% plus some interest, and that’s not realistic for your budget.
Who Should Look Elsewhere First
- Your debts are mostly secured (mortgage, car loan) — a proposal does not eliminate those.
- You can realistically pay your debts off in two to three years using a budget, a balance transfer, or a consolidation loan. Debt consolidation may be a cheaper, less invasive option.
- You have no income at all and no realistic prospect of one — bankruptcy may actually be a faster, kinder option in that case.
- Your debt is below about $5,000 — the trustee fees often make a proposal not worth it for very small balances.
- Your only debt is recent student loan debt (less than seven years since you stopped being a student) — those are not erased.
A Realistic Winnipeg Example
Numbers help. Here is a typical scenario for a single Winnipegger earning around $52,000 a year with $42,000 in unsecured debt — credit cards, a Money Mart loan, and one old collections account.
The exact percentage your trustee proposes depends on your income, your assets, and what your creditors would have received in a bankruptcy — they generally won’t accept less than that. For more concrete examples of what this looks like in real life, our consumer proposal success stories walk through several anonymized cases.
Step-by-Step: Filing a Consumer Proposal in Winnipeg
- Book a free consultation with a Licensed Insolvency Trustee. Most LITs serving Winnipeg offer a free, confidential first meeting in person or by video. You’ll go through your debts, income, assets, and household budget. If a proposal is not the right fit, a good trustee will tell you so.
- Complete a full financial review. Your trustee gathers documentation — pay stubs, a list of debts, asset values, recent tax returns — and walks you through every option available, from credit counselling to a comparison with bankruptcy.
- Draft and file the proposal. If you choose to move forward, your trustee drafts the offer (usually a percentage of your debt, paid monthly over a fixed term) and files it electronically with the Office of the Superintendent of Bankruptcy. From this moment, the stay of proceedings kicks in and creditor calls must stop.
- Wait for the creditor vote. Creditors have 45 days to accept, reject, or request a meeting. In practice, most consumer proposals are accepted without any formal meeting at all. If creditors holding the majority of the dollar value approve, the proposal binds every unsecured creditor.
- Make your monthly payments and complete two counselling sessions. You make one predictable payment to your trustee each month for the term of the proposal — most run between three and five years. You also attend two short financial-counselling sessions designed to help you build healthier money habits going forward.
- Receive your Certificate of Full Performance. Once the final payment clears, your trustee issues a certificate confirming the proposal is complete. Any remaining balances on included unsecured debts are legally extinguished, and you can begin actively rebuilding your credit.
Ready to see if you qualify?
Frequently Asked Questions
How much does a consumer proposal cost in Winnipeg?
You don’t pay your trustee a separate fee on top of your proposal payments. The trustee’s fees are set by federal regulation and are paid out of the monthly amount you contribute to the proposal — typically about 20% of your payments goes to administration, with the rest distributed to creditors. There are no upfront fees and no hidden charges. Avoid any “debt settlement” company that asks you to pay them thousands before referring you to a trustee, since that money is on top of, not instead of, the trustee’s fees.
Will I lose my house or car if I file a consumer proposal?
In almost all cases, no. A consumer proposal is designed to let you keep your assets, including your home, vehicle, RRSPs, and tax refunds, as long as you continue to make any secured payments (like your mortgage and car loan) on time. This is one of the biggest practical differences between a consumer proposal and bankruptcy in Manitoba. Your trustee will explain how any equity in your assets affects the percentage you have to offer creditors.
How long does a consumer proposal stay on my credit report?
An R7 rating appears on each account included in the proposal while you’re paying it, and the proposal itself remains on your credit report for three years after you complete it — or six years from the date of filing, whichever comes first. That sounds long, but most people see their credit start recovering within a year of completing the proposal, especially if they begin using a secured credit card responsibly and keep all other accounts current.
Can I include CRA tax debt or payday loans in a Winnipeg consumer proposal?
Yes to both. Consumer proposals can include almost all unsecured debts — credit cards, lines of credit, personal loans, payday loans, overdrafts, old utility bills, collection accounts, and unsecured tax debt owing to the Canada Revenue Agency. Things you cannot include are secured debts (mortgage, secured car loan), recent student loans (less than seven years out), court-ordered fines, and child or spousal support.
What happens if my creditors reject my consumer proposal?
If creditors holding the majority of the dollar value of your debt vote no, your proposal is deemed rejected. You usually have a chance to amend the offer — your trustee will negotiate with the major creditors to find a number they will accept, often by extending the term or modestly increasing the monthly payment. If a workable amendment cannot be reached, you can withdraw the proposal and consider other options, including bankruptcy. In practice, the vast majority of consumer proposals filed by experienced LITs are accepted, often without any changes.
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.
