Consumer proposal process in Canada: steps and timeline

A consumer proposal is a formal process administered by a Licensed Insolvency Trustee (LIT), not a consolidation loan. The LIT assesses your circumstances and develops proposed repayment terms with you. A proposal cannot run longer than five years. A quoted percentage in an advertisement is not a calculation of what your creditors will accept.

Keep a working list for your appointment. You do not have to assemble a perfect file before asking a question, but explain what is missing. The LIT will specify the records needed for your case and a secure way to provide them. Do not upload bank statements or identity documents into an ordinary lead form.

Ask the LIT to confirm the filing date, what documents you receive and which payments change. Do not confuse signing up for a callback with filing a proposal. Keep your copies together and ask how the LIT wants you to forward creditor correspondence. If you already have a trustee, contact that office for the status of your file.

Creditors have a 45-day period following filing to respond. A meeting may be requested by creditors holding at least 25% of proven claims, or directed by the OSB. If no meeting is requested within that period, the proposal is deemed accepted by creditors. Acceptance is followed by a separate 15-day period to request court review; absent a request, it is deemed approved. Ask your LIT for the dates that apply to your actual file.

Keep a payment calendar and tell the LIT promptly if your circumstances change. Under section 66.31, a proposal with monthly or more frequent payments is generally deemed annulled when arrears reach the amount of three payments, unless a relevant amendment or court order intervenes. The payments do not need to be three consecutive missed months. Different timing applies to less frequent payments. Do not wait until you reach that point to ask about your options.

Form 57 is the Certificate of Full Performance of Consumer Proposal. The administrator uses it to certify that you have fully performed the proposal’s provisions. Ask your LIT when it will be issued and keep a copy. It is not the same as an initial acceptance notice, a payment receipt or a new lender’s approval. If you cannot find it, start with the trustee who administered the proposal.

Keep the certificate with your proposal documents and review how the result is reflected in your records. Completion and removal from a credit report are separate events. If an entry appears inaccurate, record the specific account and date rather than assuming every negative item should immediately disappear. Your trustee can clarify completion; the credit bureaus handle disputes about their reports.