Your Guide To Consumer Proposals In Alberta

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Updated On: March 3, 2026

Albertans who are drowning in debt may be able to avoid bankruptcy by considering a consumer proposal first. This option is often preferred over bankruptcy because it allows individuals to keep certain assets while negotiating a reduced repayment plan with creditors.

Recent data shows that during the period of 2024 to 2025 (the latest data available), Consumer proposal filings increased 10%, highlighting the growing preference for proposals as a debt‑relief strategy¹.

This article breaks down how consumer proposals work in Alberta, why so many residents choose them, what they include, and how to determine whether this solution fits your financial situation.

Consumer Proposal In Alberta: Overview

Feature	Details (Alberta)
What It Is	A legal debt settlement agreement filed under the Bankruptcy and Insolvency Act (BIA) & administered by a Licensed Insolvency Trustee (LIT).
Program Features	Allows you to settle unsecured debts by repaying only a portion of what you owe over a period of up to 5 years.
Who Can File	Consumers with up to $250,000 in unsecured debt (excluding a mortgage on a principal residence).
Key Benefit	Reduce debt while keeping certain assets that would be at risk in bankruptcy.
Credit Rating Impact	– Assigned an R7 rating. – The proposal remains on credit reports for 3 – 6 years.
Cost to File	– No upfront fees. – All trustee fees are government‑regulated and included in monthly proposal payments.

What Is A Consumer Proposal?

A consumer proposal is a formal debt‑settlement process administered by a Licensed Insolvency Trustee (LIT). Through this program, the trustee works with you to create an offer for your creditors, usually involving paying back only part of what you owe or extending the repayment timeline.

Learn more: Consumer Proposal

How Does A Consumer Proposal Work?

Once a consumer proposal is filed, you no longer make payments directly to your creditors. Instead, you send payment to your LIT, who then distributes the funds according to the terms of the proposal.

This approach is often viewed as a practical alternative to bankruptcy because it provides legal protection while allowing you to keep important assets. During the proposal:

Wage garnishments stop
Collection calls must end
Interest on unsecured debts freezes
Your home and other key assets are not automatically at risk

Although your credit rating will be affected, the impact is generally less severe than a bankruptcy.

Why Do Creditors Accept A Smaller Repayment Amount?

Creditors typically prefer receiving a partial repayment rather than risking no repayment at all. However, they won’t approve just any offer. That’s why working closely with an LIT is essential, as they can help come up with a proposal that’s realistic for you and reasonable for your creditors.

Do You Qualify For A Consumer Proposal?

To qualify for a consumer proposal in Alberta, you must meet the following criteria:

You must be a Canadian resident
Your unsecured debt must total $250,000 or less (not including a mortgage on your primary home)
You must file as an individual (not incorporated businesses or corporations)

Types Of Debts Included In Consumer Proposals²	Types Of Debts *Not* Included In Consumer Proposals
– Credit cards – Personal loans – Payday loans – Utility bills – Lines of credit – Student loans (if you’ve been out of school for at least 7 years) – Income tax debt	– Secured debts – Child support payments – Spousal support payments – Student loans (if it hasn’t yet been 7 years since you’ve been out of school) – Court fines

How To File A Consumer Proposal In Alberta

To file a consumer proposal, you must work with a Licensed Insolvency Trustee who will file on your behalf.

Licensed Insolvency Trustees In Alberta

Here are a few LIT offices in Alberta to help you narrow down your search:

BDO Canada	— 903 8th Avenue Southwest, Suite 620, Calgary, AB — 910130-103 St, Suite 900, Edmonton, AB	Learn More
Consolidated Credit	— 144-4th Ave. SW, Suite 1600, Calgary, AB — 10180, 101 St. North West, Suite 3400, Edmonton, AB	Learn More
4 Pillars	— Suite 1800 – 330 5th Ave SW, Calgary, AB — 207, 9411A 20th Ave NW, Edmonton, AB	Learn More

What To Expect When Meeting With Your Trustee

Your first meet-up with your LIT will involve the following:

Initial Consultation: Your first appointment with an LIT is typically free and focuses on reviewing your financial situation. You’ll be asked to provide details about your income, debts, assets, and monthly expenses so the trustee can understand your full financial picture.
Review Your Options: After assessing your information, the LIT will explain whether a consumer proposal is a suitable solution or if another form of debt relief may be more appropriate. Their role is to help you understand every option available.

Tip: Choose a trustee you feel comfortable with. You’ll be working with them throughout the entire process, so trust and good communication are essential.

What Happens After Filing Your Consumer Proposal?

Once you’ve filed your consumer proposal in Alberta, the following will take place:

Drafting The Proposal

Your LIT will prepare a formal proposal outlining the following:

How much you can reasonably repay
Whether payments will be made monthly or as a lump sum
The length of the repayment period (up to five years)
Which assets you intend to keep

Submitting The Proposal

Once the proposal is finalized, your trustee will file it with the Office of the Superintendent of Bankruptcy. Then, your creditors have 45 days to review the offer and vote on whether to accept it.

What If Creditors Reject Your Proposal?

If creditors vote against your proposal, you’re not out of options. You can work with your LIT to revise the offer and resubmit it. If a revised proposal still isn’t accepted, you may need to explore other debt‑relief solutions, including bankruptcy (a last resort).

Making Payments

If the proposal is approved, you’ll begin making the agreed‑upon payments directly to your LIT, who will distribute the funds to your creditors.

Attending Counselling

You’ll also be required to attend two financial counselling sessions during the process.

Stay Of Proceedings

Filing a consumer proposal triggers a Stay of Proceedings, which legally stops wage garnishments, lawsuits, and all collection activity. Creditors must immediately halt any attempts to collect.

Learn more: What Is A Stay Of Proceedings In Canada?

Will Your Assets Be Protected Under A Consumer Proposal?

You won’t risk losing valuable belongings the way you might in a bankruptcy. With a consumer proposal, all your assets remain yours, provided the repayment offer you make to creditors is reasonable and reflects what you can realistically afford.

For example, let’s say you owe $60,000 in unsecured debt but you also own a Lamborghini outright, which is worth $100,000. Then, you decide to file a consumer proposal offering to repay $20,000 over 5 years.

Odds are your creditors will not accept this proposal, given the fact that you have $100,000 in vehicle equity. In this case, the car can be sold and the proceeds can be used to repay your creditors what they’re rightfully owed. Ultimately, your offer must be better than what they’d get in bankruptcy.

Can I Keep My House?

Yes, in most cases, you can keep your home when you file a consumer proposal, as long as you continue making your mortgage payments³. You’ll also need to make sure you have enough money to cover the monthly amount set out in your proposal.

If the combined cost of your mortgage and consumer proposal payments is more than your budget can handle, you may have to look at selling the property and using any remaining equity to reduce your debt, or explore a different form of debt relief.

Note: Your home equity can play a role in determining how much you’ll need to offer in your consumer proposal.

Can I Keep My Car?

You can generally keep your vehicle during a consumer proposal because the proposal doesn’t interfere with an existing car loan. As long as you’re able to manage both the proposal payments and your car loan payments, the lender will allow you to keep the car. Still, it’s worth considering whether maintaining the vehicle is the most financially sensible choice.

Sell Your Car & Use The Equity To Pay Your Creditors: One option is to sell the car and use part of the proceeds to reduce what you owe through the proposal. The challenge is that many vehicles depreciate faster than the loan balance drops, which can leave you owing more than the car is worth.
Voluntarily Surrender The Vehicle: Another possibility is to return the vehicle to the lender. If you surrender it and the sale doesn’t cover the remaining loan balance, the leftover amount becomes unsecured, and that shortfall can be included in your consumer proposal.

Will A Consumer Proposal Affect My RRSPs?

Registered savings plans, such as RRSPs, are generally protected in a consumer proposal. Unlike bankruptcy, where contributions made in the previous 12 months may be subject to seizure, a consumer proposal protects the full value of your RRSPs from creditors. You also aren’t required to cash out your savings or liquidate investments when filing a proposal.

Will My TFSA Be Affected?

Funds held inside a TFSA are not accessible to your creditors, even when you file a consumer proposal.

For example, let’s say you owe $25,000 in credit card debt and have $4,000 saved in a TFSA. After filing a consumer proposal, you keep the full $4,000 — there’s no requirement to withdraw or surrender it. Your trustee might negotiate a repayment plan to settle the $25,000 balance.

Additional Reading

Can You Use A Loan To Pay Off Your Consumer Proposal?

Is It Possible To File A Joint Consumer Proposal?

Debt Management Program vs. Consumer Proposal

Final Thoughts

A consumer proposal is just one of many effective debt relief solutions available to Albertans. It’s a viable option to help you avoid bankruptcy, protecting your assets while dealing with your debts. Speak with an LIT to see if a consumer proposal is right for you.

FAQs

When will my proposal be accepted?

After your consumer proposal is submitted, creditors have 45 days to review it and decide whether to approve or reject the offer. If you owe money to several creditors and any one of them holds 25% or more of your total debt, they can request a meeting to discuss the proposal. During that meeting, creditors vote on the offer, and the outcome of that vote determines whether the proposal moves forward.

How much will it cost?

The cost of a consumer proposal is built into your monthly payments. There are no upfront fees, and the trustee’s costs are regulated by the federal government.

How much will my payments be?

Your payment amount depends on your income, your budget, and what creditors are likely to accept. The trustee works with you to create an affordable offer, often much lower than the full amount you owe.