Consumer Proposal

Understand consumer proposals in Canada — what they are, how they help manage debt, and how they protect assets like homes.

Consumer Proposal

July 11, 2025


What is a Consumer Proposal?

A consumer proposal is a formal, legally binding agreement in Canada between an individual and their creditors to repay a portion of their debt over time, as an alternative to bankruptcy.

Why Consumer Proposals Matter in Real Estate

In Canadian real estate and finance, consumer proposals can help homeowners avoid bankruptcy and retain property while addressing debt.



Key characteristics:
  • Filed through a licensed insolvency trustee
  • Stops collection actions and legal proceedings
  • Allows restructuring of unsecured debt
  • Requires creditor and court approval



Understanding consumer proposals helps homeowners, lenders, and buyers assess credit risk and protect assets.

Example of a Consumer Proposal in Action

The homeowner filed a consumer proposal to manage unsecured debt while keeping their home and avoiding bankruptcy.

Key Takeaways

  • Alternative to personal bankruptcy
  • Allows structured debt repayment
  • Stops legal actions and collections
  • Protects some assets like homes
  • Requires trustee and creditor agreement

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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