In this guide
If you live in Alberta and are struggling to keep up with your debt payments, a consumer proposal lets you repay part of your debt and have the rest forgiven.
Here’s what you need to know about a consumer proposal in Alberta, including how it works, its advantages and disadvantages, costs and how to file.
What is a consumer proposal?
A consumer proposal is a formal agreement between you and your creditors to repay a portion of your debts, with the remainder forgiven.
It’s a legally binding agreement, filed through a Licensed Insolvency Trustee (LIT), that allows you to reduce and consolidate your debt without declaring bankruptcy. Only a federally licensed LIT can file a consumer proposal on your behalf.
In November 2025 alone, 1,252 consumer proposals were filed in Alberta, bringing the total to 18,855 over the past year. Albertans continue to prefer proposals over bankruptcy to resolve their debt issues.
Source: Government of Canada – Insolvency Statistics in Canada—November 2025
What happens when you file a consumer proposal in Alberta?
A consumer proposal is a legally binding agreement with your creditors that allows you to restructure your unsecured debt into a single monthly payment with zero interest.
In most cases, you repay only a portion of your debt, with all your debts eliminated once you have made payments.
Your debts are consolidated into one fixed monthly payment. Interest is frozen, collection calls stop, and wage garnishments are reversed.
You can spread out consumer proposal payments for up to five years, and you can finish your proposal early if you’re able to pay more.
What are the pros and cons of a consumer proposal?
Pros
- A consumer proposal can help lower your debt based on your affordability. Once completed, all your debts are eliminated.
- You combine your debts into a single affordable monthly payment that won’t increase, even if your income does.
- Most unsecured debts can be included. Income tax debt, CERB, and other government debts can also be discharged.
- A consumer proposal provides legal protection from creditors, stopping debt collection calls, wage garnishments, and other court proceedings.
- You can keep your assets, like your home, car, and investments.
- Once your proposal starts, interest and charges are frozen.
- It is a safe debt relief program administered by licensed professionals regulated by the federal government under Canada’s Bankruptcy and Insolvency Act.
Cons
- Like most debt relief solutions, a consumer proposal affects your credit rating, but the impact is temporary, and you can rebuild your credit score.
- You must have income remaining after essential monthly bills to make payments to your creditors.
- A consumer proposal takes longer than bankruptcy, but your monthly payments are lower.
- Not all debt can be discharged. Secured debts cannot be eliminated, but you can continue making payments to secured creditors to keep the asset.
- Student loans can only be discharged if you have been out of school for at least seven years.
Source: Government of Canada – Bankruptcy and Insolvency Act, Section 178(1)(g)
Do I qualify for a consumer proposal?
You qualify for a consumer proposal if you meet the following eligibility criteria:
- Your total debts are less than $250,000 (excluding your mortgage).
- You live in Canada (a permanent resident or under a work permit or another status) or own property in Canada.
- You are insolvent, unable to pay your debts as they become due, and owe more than your assets are worth.
- You can afford to make a monthly repayment towards your debt after essential bills.
You need to offer your creditors more money than they would get if you filed for bankruptcy. This offer must include all of your unsecured creditors.
If you want to file a consumer proposal in Alberta, discuss your situation with a Licensed Insolvency Trustee. There’s no obligation, and it’s entirely free.
At Moses Advisory Group, our Licensed Insolvency Trustees in Alberta have helped thousands of Canadians resolve their debt problems.
What are alternative debt relief options to a consumer proposal?
If a consumer proposal isn’t suitable, there are many other debt relief options available to Albertans.
Personal bankruptcy
In bankruptcy, your debts are discharged once you complete specific duties, such as reporting your income, making monthly payments, and potentially relinquishing some assets.
You make payments based on your household’s monthly net income. If you have assets that aren’t protected under bankruptcy exemptions, they could be sold to help repay your creditors.
Orderly Payment of Debts (OPD)
There’s also a formal debt solution in Alberta called the Orderly Payment of Debts (OPD) program, which consolidates unsecured debts into a single, legally binding payment plan with a 5% interest rate.
Credit Counselling
Credit counselling can help negotiate lower interest rates with your creditors, often through a debt management program.
If you decide to proceed with a credit counselling service, be sure to choose a non-profit credit counsellor.
Debt Consolidation
A debt consolidation loan lets you combine multiple debts into one lower payment, but it requires good credit and a steady income.
How much does a consumer proposal cost in Alberta?
The cost of a consumer proposal depends on how much you owe, your creditors, how much money you make, and whether you have any assets.
Your Licensed Insolvency Trustee will decide on a fair offer to your creditors, and you will only pay what you can afford. You make a fixed payment that will never change.
A trustee’s fees are paid from your proposal at no additional cost to you.
Consumer proposal FAQs
What debts can I include in a consumer proposal?
You can include most unsecured debts, such as credit card debts, personal loans, bank loans, overdrafts, income taxes, payday loans and utility bills.
Can a consumer proposal stop my wage garnishment?
A consumer proposal quickly stops wage garnishments and provides immediate relief from legal action and collection calls.
Can I include my student loan debt in a consumer proposal?
A consumer proposal can eliminate student loan debt if you have been out of school for seven years or more. If you have been out of school for less than seven years, a proposal won’t erase your student loan debt.
Source: Government of Canada – Bankruptcy and Insolvency Act, Section 178(1)(g)
Is my home at risk in a consumer proposal?
You can keep your home as long as you stay current with your mortgage payments and property taxes.
Will a consumer proposal affect my mortgage?
A proposal does not impact your mortgage, and your lender can’t use it as a reason to change the terms of your mortgage.
Will I lose my car in a consumer proposal?
You can keep all your owned vehicles, regardless of their value, if you continue to make the payments on schedule. Alternatively, you can cancel a car loan or lease agreement before filing a proposal.
Will a consumer proposal affect my credit score?
A consumer proposal affects your credit score, but it won’t be damaged forever.
How long does a consumer proposal stay on your credit report?
The proposal appears on your credit report for three years after you’ve completed your proposal or six years from the date you filed (whichever is sooner).
Source: Equifax – How Long Does Information Stay on My Equifax Credit Report?
Can I pay off a consumer proposal early?
You can pay off a consumer proposal early without any penalty charges or interest. If you can pay it off quicker, you can improve your credit rating faster.
Will my creditors accept the proposal?
Most creditors prefer that you enter a consumer proposal rather than file for bankruptcy because they receive more money.
What happens after my proposal is complete?
Once you have made all your monthly payments, your LIT will release you from your debt, and you will be debt free.
What is a Licensed Insolvency Trustee?
A Licensed Insolvency Trustee is a federally regulated professional who provides debt advice, administers government debt relief options like consumer proposals and bankruptcies, safeguards the rights of both you and your creditors, and always acts in your best interest.
A Licensed Insolvency Trustee (LIT) is still referred to by various defunct or incorrect titles, such as a “Bankruptcy Trustee,” “Trustee in Bankruptcy,” or “Licensed Bankruptcy Trustee.” The name was changed in 2016 to reflect its broader role beyond bankruptcy.
How to file a consumer proposal in Alberta
If you want to file a consumer proposal in Alberta, you must first contact a Licensed Insolvency Trustee (LIT) to establish whether it’s the right solution for you.
Your LIT will review your financial situation and present the debt relief options that best suit your situation. All advice is impartial.
A consumer proposal must be submitted by a LIT who negotiates with your creditors on your behalf.
To find out if a consumer proposal is right for you and for other debt repayment options, speak to one of our Licensed Insolvency Trustees for free by video, phone or in person.
