Your Guide To Consumer Proposals In Manitoba

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Updated On: March 16, 2026

If you’re overwhelmed by debt in Manitoba, you’re not alone. Rising living costs across the province, combined with mounting debt, have left many Manitobans searching for real solutions. One option that can help you avoid bankruptcy while reducing what you owe is a consumer proposal in Manitoba.

This guide will walk you through everything you need to know about consumer proposals in Manitoba, including how they work, who qualifies, what debts are included, and how your assets are treated.

Consumer Proposal Overview

What It Is	A federally regulated debt‑relief program. Rules are the same nationwide under the Bankruptcy and Insolvency Act (BIA).
Who Qualifies	Those with no more than $250,000 in unsecured debt.
Main Features	– Consumers repay a portion of their unsecured debts over a period of up to 5 years. – Consumers can retain their valuable assets.
Effect On Credit	R7 rating noted on credit reports for 3 to 6 years.
Types Of Debts Covered	Unsecured debts, like: – Credit card debt – Payday loans – Lines of credit – Income tax debt – Utility bills

Learn more: Consumer Proposal

What Is A Consumer Proposal In Manitoba?

A consumer proposal is a legally binding agreement between you and your unsecured creditors. It allows you to repay only a portion of what you owe over a period of up to 5 years.

Key features of a consumer proposal are as follows:

Interest stops immediately
Collection calls stop
Wage garnishments stop
You keep your valuable assets
Payments are fixed and predictable
Creditors cannot change the terms once accepted
Only a Licensed Insolvency Trustee (LIT) can file a consumer proposal on your behalf.

How Does A Consumer Proposal Work In Manitoba?

Here’s a simple breakdown of the process of filing a consumer proposal in Manitoba:

Step 1: Meet With A Licensed Insolvency Trustee

Your trustee will review your income, debts, assets, and budget to determine whether a consumer proposal is the best option for you.

Here are a few LITs in Manitoba to help you get started:

BDO Canada	– 201 Portage Ave. 26th Floor, Winnipeg, MB – 148 10th Street, Brandon, MB	Learn More
Consolidated Credit	– 201 Portage Avenue, Winnipeg, MB	Learn More
4 Pillars	– Suite 300,330 St. Mary Avenue, Winnipeg, MB	Learn More

What To Expect When You Meet A Licensed Insolvency Trustee

Your first meeting with an LIT is a financial review. During the meeting, the trustee will:

Review your debts and income
Explain all debt‑relief options (not just consumer proposals)
Help you understand the pros and cons of a consumer proposal
Recommend the best path forward

You’ll also learn:

How much your proposal payment would be
How long it would last
Whether creditors are likely to accept it
What assets you can keep

Step 2: Proposal Is Drafted

Your consumer proposal will include how much you can afford to repay and over what period.

Step 3: Proposal Is Sent To Your Creditors

Your creditors have 45 days to vote on whether to accept or reject your proposal. If the majority accepts, the proposal becomes binding.

Step 4: A Stay Of Proceedings Takes Effect

When you file a consumer proposal, a legal protection called a stay of proceedings immediately takes effect. This stops all collection activity on the spot, including wage garnishments, lawsuits, and any attempts by creditors to pursue payment. From that moment forward, creditors are legally required to cease all enforcement actions.

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

Step 5: You Make Monthly Payments

You must make payments directly to your trustee, who distributes the funds to your creditors.

Step 6: You Attend Counselling Sessions

Two mandatory financial counselling sessions are designed to help you rebuild your financial habits.

Step 7: You Receive A Certificate Of Completion

Once your consumer proposal is complete and you’ve met all requirements to fulfill it, you’ll receive a certificate that shows that your proposal is complete and your remaining unsecured debt is legally discharged.

Why Creditors May Accept A Lower Repayment Amount

Creditors often agree to accept a reduced repayment because it’s usually better than risking no recovery at all if your financial situation worsens. That said, they won’t approve an unrealistic offer.
That’s why working with a Licensed Insolvency Trustee is so important, as they will help come up with a proposal that fits your budget while still offering creditors a fair and reasonable return.

Eligibility For A Consumer Proposal In Manitoba

To qualify for a consumer proposal, you must meet the following criteria¹:

You owe no more than $250,000 in unsecured debt (not including your mortgage).
You are insolvent, which means you cannot pay your bills.
You have a stable income that allows you to make monthly payments.
You are a Canadian resident or have property in Canada.

What Makes A Good Candidate For A Consumer Proposal?

You may be a good candidate if:

– You’re making minimum payments on your debts but your balances aren’t going down.
– You’re facing wage garnishment or collection action.
– You want to avoid bankruptcy and keep your assets.
– You have multiple unsecured debts that are unmanageable.

Types Of Debt Included & Not Included In A Consumer Proposal

Not all debts can be included in a consumer proposal. More specifically, unsecured debts may be included, while secured debts cannot².

Debts Included in a Consumer Proposal	Debts NOT Included In A Consumer Proposal
– Credit cards – Personal loans – Lines of credit – Payday loans – Income tax debt – Student loans (if the loans are 7+ years old) – Utility bills – Medical bills – Old cell phone or internet accounts	– Secured personal loans – Mortgages – Car loans – Student loans under 7 years old – Court‑ordered fines – Child support or spousal support – Fraud‑related debts

Important note: You must continue paying your mortgage or car loan to keep the asset.

Will Your Assets Be Protected Under A Consumer Proposal?

One of the biggest advantages of a consumer proposal is that you don’t risk losing your belongings the way you might in a bankruptcy. As long as the offer you make is fair and reflects what you can reasonably afford, your assets remain yours throughout the process.

However, the proposal still needs to make financial sense from the creditors’ perspective.

Example:

Let’s assume you owe $50,000 in unsecured debt but own a luxury vehicle worth $120,000 outright. If you submit a proposal offering to repay only $30,000 over 5 years, creditors are unlikely to accept it, since the equity you have in your vehicle is more than enough to cover your debt. In a situation like this, they know the car could be sold and the proceeds used to repay them in full.

Ultimately, your offer must provide a better return than what creditors would receive if you filed for bankruptcy.

Can I Keep My House?

In most cases, yes, you can keep your home when you file a consumer proposal. However, you must continue making your mortgage payments and can still afford the monthly proposal amount. A proposal doesn’t interfere with your mortgage, and your lender cannot force a sale simply because you filed.

That said, your budget still needs to work. If the combined cost of your mortgage and proposal payments is more than you can manage, you may need to consider selling the property and using any available equity to reduce your debt, or explore a different form of debt relief.

Keep in mind that your home equity may influence how much you need to offer in your proposal.

Can I Keep My Car?

Yes, most people keep their vehicle during a consumer proposal. Because the proposal doesn’t touch secured debts, your car loan continues as usual. As long as you stay current on your payments and can handle both the loan and the proposal, like a mortgage, the lender will allow you to keep the car.

Still, it’s worth thinking about whether keeping the vehicle is the best financial choice. You may have alternatives:

Sell The Vehicle & Use The Equity: If your car is worth more than what you owe, you could sell it and apply some of the equity toward your proposal. This can reduce your monthly payment or shorten the repayment period. The challenge is that many vehicles depreciate quickly, leaving little or no equity.
Voluntarily Surrender The Vehicle: You can also return the car to the lender. If 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 My RRSPs Be Affected?

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 allows you to keep the full value of your RRSPs. You’re not required to cash out investments or use retirement savings to repay creditors.

Will My TFSA Be Affected?

Your TFSA remains yours when you file a consumer proposal. Creditors cannot access the funds, and you’re not required to withdraw or liquidate your savings.

For example, if you owe $30,000 in credit card debt and have $6,000 in a TFSA, you keep the entire $6,000. Your trustee will help negotiate a repayment plan for the $30,000, but your TFSA stays intact.

What If Your Creditors Reject Your Proposal?

If creditors reject your proposal, you still have options:

Renegotiate: Your trustee can adjust the terms and resubmit your consumer proposal.
Offer A Lump‑Sum Settlement: Sometimes a one‑time payment may be more appealing to creditors.
Consider Bankruptcy: This is a last resort but remains an option.

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 can be a practical, affordable path to financial recovery for Manitobans who feel overwhelmed by debt but want to avoid bankruptcy. By working with a Licensed Insolvency Trustee, you can create a repayment plan that protects your assets and gives you room to rebuild your financial and credit health. With the right support, a consumer proposal can help you regain control of your finances and move forward with confidence.