Many people avoid consumer proposals because of myths and misunderstandings.
The truth is that a consumer proposal can reduce your debt by about 70%, protect your assets, and give you one affordable payment. This page breaks down the most common myths so you can understand exactly how a consumer proposal really works.
Consumer-Proposal-Myths
This is one of the most common myths, but it is completely inaccurate. A consumer proposal is designed to protect your assets. When you file, you keep your:
This protection exists because a proposal is a settlement, not a liquidation. Unlike bankruptcy, a proposal does not require you to surrender anything. For many people, this is the main reason they choose a proposal instead of filing bankruptcy.
To understand this fully, see our guide on what assets you keep in a consumer proposal.
A consumer proposal does affect your credit, but not permanently. Your score improves as soon as your finances stabilize. Learn more in our full article on credit score recovery after a consumer proposal.
Recovery happens because the proposal:
Credit scoring models reward stability, and a proposal makes your finances stable again. With simple rebuilding steps, many people see improvements within 6 to 12 months.
A consumer proposal is a legally binding debt reduction plan. Most people repay only 30% or less of their debt with no interest over three to five years.
You pay less because the trustee designs the proposal based on:
If you want to see how your payment is calculated, visit our page on how consumer proposal payments are calculated.
Most consumer proposals are accepted because they offer creditors more than bankruptcy. Learn why acceptance rates are high on our page about how creditors approve a consumer proposal.
Trustees structure proposals using:
This is why the majority of proposals pass on the first vote.
A consumer proposal is very different from bankruptcy. See a full comparison here: consumer proposal vs. bankruptcy.
With a proposal:
A proposal is often the most affordable debt solution available. For a full breakdown of costs, visit: consumer proposal cost in Ontario.
Costs stay low because:
Most people pay between $150 and $350 per month.
A proposal usually lasts three to five years, but you can pay it off early with no penalties.
See the full step-by-step timeline here: consumer proposal timeline.
Many people finish early because they:
Consumer proposals are private. If you’re unsure whether it’s the right choice, see how to choose a consumer proposal trustee.
Employers are not notified unless a garnishment must be stopped.
A consumer proposal is not public the way bankruptcy is.You can read more about privacy and eligibility here: consumer proposal qualifications.
Only you, the trustee, and your creditors are aware of it. Your privacy is fully protected.
All unsecured debts, credit cards and unsecured loans can be applied to a consumer proposal, getting you completely debt free in 5 years or less!
This consumer proposal calculator shows an approximate of how much you could save.
If you’re feeling overwhelmed by debt and not sure where to start, the best thing you can do is talk to someone who understands.
Call now and speak directly with me — Kelly Dey — for clear, honest advice that’s tailored to your situation. There’s no pressure and no judgment. We’ll look at your options together and create a plan that helps you breathe again. Getting started is easier than you think, and one simple conversation can put you back in control of your money and your life.
Let’s take that first step today, call 905-721-7506.
A. Consumer proposals are far more private than most people expect. Only you, your trustee, and your creditors are involved. The proposal isn’t published online, isn’t sent to friends or family, and doesn’t appear in newspapers. The only time your employer might see anything is if you already have a wage garnishment, and in that case, all they receive is a notice that the garnishment has ended — not the details behind it. For most people, the proposal stays completely confidential.
A. It’s rare for a proposal to be fully rejected. Trustees design proposals based on what creditors usually approve, so the offer is already aligned with industry expectations. Creditors tend to say yes because a proposal usually pays them more than a bankruptcy would. Even if they ask for changes, these adjustments are often small — such as a slightly higher monthly amount or a longer repayment term — and most people agree because the payment is still far below the original debt.
A. No. Your credit is affected at first, but the damage is temporary and much less than most people fear. Scores often begin to rise within a few months because your debt drops sharply, interest stops, and your payments become predictable. People who rebuild actively — using tools like secured credit cards, on-time bill payments, and low balances — often see meaningful increases long before the proposal is completed. In many cases, credit is stronger during the proposal than it was before filing.
A. Not at all. They’re completely different processes. A proposal lets you keep your assets, gives you predictable payments, and reduces your debt by about 70%. Bankruptcy may require you to surrender assets, increases payments when your income rises, and places the strongest credit rating (R9) on your file. A proposal is more flexible, less intrusive, and easier to manage for anyone with steady income.
A. Yes. You can pay off your proposal at any time with zero penalties.
Many people finish early because they receive a tax refund, get a raise, or want to rebuild credit faster. Early repayment shortens the R7 reporting period and starts your long-term credit recovery sooner. Paying it off early is one of the biggest advantages over other debt programs that lock you into fixed lengths.
Insolvency Trustee – Kelly Dey
If you’re feeling weighed down by money or debt issues, give me a call at 905-721-7506 and lets just have conversation.
Table of Contents
Kevin T.
3 days ago
★★★★★ I avoided calling for years because I believed all the myths. I thought I’d lose my home and that everyone would find out. None of it was true. The proposal cut my debt down by almost 70% and I kept everything. I wish I had done this sooner.
Alyssa D.
1 week ago
★★★★★ I always heard that a consumer proposal destroys your credit, but my score started improving within a few months. They explained every myth clearly and made the process simple. The truth was nothing like the scary stories I read online.
Gloria M.
2 weeks ago
★★★★★ I thought creditors would reject the proposal, but they accepted it right away. I learned that most of what I believed was wrong. The monthly payment was fair, interest stopped instantly, and I finally felt in control again.
Peter L.
3 weeks ago
★★★★★ I assumed a proposal was basically the same as bankruptcy, but it’s completely different. I didn’t lose anything, my income didn’t change the payment, and my debt dropped by thousands. They cleared up every myth I had.
Sandra R.
1 month ago
★★★★★ I believed a proposal would affect my job and that it would be public. Both were myths. Everything stayed private, and my employer only saw that the garnishment stopped. The whole process was easier and more respectful than I imagined.
Rise Above Your Debt!
Call 905-721-7506
