Consumer Proposal Pros and Cons: What You Need to Know

If you’re feeling overwhelmed by credit card debt, personal loans, or collection calls, a consumer proposal might be the answer. But like any financial solution, it’s important to know the full picture.

Here’s a straightforward list of pros and cons to help you decide:

Pros of a Consumer Proposal:

✅ Reduce What You Owe – You may pay back only 30–50% of your total debt. The rest is legally forgiven.
✅ Keep Your Assets – You can keep your home, vehicle, investments, and personal belongings.
✅ Stop Collections – Creditors and collectors must stop contacting you immediately after filing.
✅ One Monthly Payment – Easy to manage and based on what you can realistically afford.
✅ No Interest Charges – Unlike loans, no interest is added to your balance.
✅ Avoid Bankruptcy – Ideal for those who want relief without the consequences of filing for bankruptcy.

Cons of a Consumer Proposal:

⚠️ Credit Impact – A consumer proposal will appear as an R7 rating and stay on your credit report for 3 years after completion or 6 years after filing.
⚠️ Takes Time – Proposals can last up to 5 years depending on your payment terms, though you are free to pay them off early.
⚠️ Not All Debts Are Included – Student loans under 7 years old, alimony, and court fines are not eligible.

Manitoba Case Example:

A recent grad in Brandon with $32,000 in credit card and payday loan debt filed a consumer proposal through Lazer Grant. She cut her debt by 60% and now makes one simple monthly payment she can afford.

Final Thoughts:

A consumer proposal can be a powerful alternative to bankruptcy—but is it right for you? Make sure you fully understand the benefits and drawbacks. At Lazer Grant, our Winnipeg-based team offers free consultations to help you explore your options.

📞 Contact us today to find out if a consumer proposal is your path to a debt-free life.