The Consumer Proposal Timeline, Month by Month

If you are thinking about filing a consumer proposal, one of the first questions is usually simple:

How long will this take?

The answer depends on which part of the process you mean.

The approval process usually moves fairly quickly. The repayment period can last months or years, depending on the proposal you file.

This guide walks through the entire consumer proposal process, month by month, from your first meeting with a Licensed Insolvency Trustee to the Certificate of Full Performance that formally ends it.

If you want a broader explanation of how consumer proposals work, see the Consumer Proposal Resource Centre.

One Thing to Understand Before You Start

Two separate timelines run through every consumer proposal.

The first is the consumer proposal process itself. This includes filing, creditor review, approval, and the administrative steps required by law. This part generally moves quickly.

The second is the payment timeline. This is the period during which you make the payments set out in your proposal. Depending on your circumstances, it may last several months or up to the maximum period permitted by law.

Many people think a consumer proposal takes years to be approved. It does not. Most of the time involved is the repayment period, not the approval process.

One piece of vocabulary, once. A consumer proposal is the streamlined process for individuals under Division II of the Bankruptcy and Insolvency Act. The Licensed Insolvency Trustee who files it for you carries the statutory title of Administrator.

Before You File: The Part With No Legal Clock

There is no legal deadline for the period before filing.

This stage moves at your pace and depends largely on how quickly the necessary information can be gathered.

During this period, you will:

• Meet with a Licensed Insolvency Trustee. An initial consultation is normally free and carries no obligation.
• Review your income, debts, assets, and financial circumstances. That review is governed by Directive No. 6R7, Assessment of an Individual Debtor.
• Decide whether a consumer proposal is the right solution.
• Provide the documents needed to prepare the proposal. Usually that means recent pay records, a list of your debts, and any outstanding tax returns brought current.

For someone with organized records, this stage may take only a few days. If tax returns are outstanding or key information is difficult to locate, it can take weeks or longer.

If speed matters, the most helpful thing you can do is gather your documents before the first meeting.

Filing Day: When the Relief Begins

The day your proposal is filed is often the most important day in the process. Call it day zero, because both timelines start here.

Your Licensed Insolvency Trustee files the proposal with the Office of the Superintendent of Bankruptcy. Once that happens, the legal process begins.

For many people, the biggest immediate benefit is the stay of proceedings.

In general, collection action by unsecured creditors stops and wage garnishments by ordinary unsecured creditors stop. The relief starts when the proposal is filed, not before. No amount of negotiation beforehand stops a garnishment. The filing does.

A few types of claims are treated differently. Stopping CRA Garnishments and Bank Freezes: A Practical Guide for Canadian Business Owners explains those situations in more detail.

For many people, filing day is the day the pressure starts to ease.

The First Ten Days: Creditors Receive the Proposal

Within ten days after filing, the Administrator must send your creditors the documents required under the Bankruptcy and Insolvency Act.

These documents generally include:

• A copy of the proposal.
• Information about your financial affairs.
• Proof of claim forms.
• Voting materials.

This stage is handled by your trustee. There is usually little for you to do.

The Next 45 Days: Creditors Review the Proposal

After filing, creditors have 45 days to review the proposal and decide whether they wish to take any action.

Many people imagine this stage involves court appearances, hearings, or lengthy negotiations. In most cases, it does not.

Most consumer proposals proceed quietly. What actually arrives in your own mailbox during these 45 days is usually very little. The heavy mail goes to your creditors, not to you.

A creditor can request a meeting of creditors within this period. If a meeting is requested, it must be held within 21 days of the request.

The details of voting, creditor meetings, the 25 percent meeting trigger, what happens if a proposal is rejected, and how approval works when the path diverts are all explained in the Consumer Proposal Resource Centre.

In the typical case, no meeting is requested.

When that happens:

• No meeting is held.
• No court appearance is required.
• No hearing is required.
• Creditors are deemed to accept the proposal at the end of the 45-day period.
• The court is deemed to approve it about fifteen days after that, which lands around day 60.

Most people simply receive confirmation from their trustee that the proposal has been approved.

So the practical answer to how long approval takes is about two months from the day you file, on the ordinary path. That is the usual route rather than a guaranteed one, because a creditor can call for a meeting and a vote can go the other way.

When Do Payments Start?

Your proposal sets the payment amount and payment schedule.

There is no single payment date that applies to everyone.

In many cases, the first payment is made during the month following filing.

Two practical points matter.

First, payments generally begin according to the terms of your proposal and do not wait for the creditor review process to finish.

Second, unlike a bankruptcy, a consumer proposal does not normally require ongoing surplus income recalculations. So a later rise in your income does not raise the payment. The payment amount set out in the proposal remains the payment amount unless the proposal itself is changed.

If you want to understand how proposal payments are determined, see How a consumer proposal payment is calculated.

The Two Mandatory Counselling Sessions

Every consumer proposal includes two financial counselling sessions.

These sessions are an important part of the process because the proposal cannot be fully completed until both have been finished.

Their timing is set by Directive No. 1R8, Counselling in Insolvency Matters, issued March 18, 2024. The windows are:

• The first session falls between 10 and 90 days after filing.
• The second follows at least 30 days after the first.
• There is no fixed outer deadline, except that both must be done before the Certificate of Full Performance can be issued.

Put those windows together and the earliest both sessions can be complete is about day 40. The outer bound is the life of the proposal.

Their purpose is practical. They are designed to help you understand the circumstances that led to financial difficulty and to develop strategies for managing credit, budgeting, and future financial decisions.

The important point is simple:

Do not leave the counselling sessions to the last minute.

Even if every payment has been made, completion of the proposal can be delayed if the counselling requirements have not been met.

When your trustee’s office offers the sessions, it is usually best to complete them promptly.

The Long Middle: Making the Payments

Once the proposal has been approved, most people settle into a routine.

This is generally the quietest part of the process.

You make your payments, complete any remaining counselling requirements, and continue with daily life while the proposal runs in the background.

How tax refunds are treated while the proposal runs is answered on the tax page, Consumer Proposals, Tax Refunds, and Taxes.

The law allows a consumer proposal to run for a maximum of five years. That ceiling is set by section 66.12(5) of the Bankruptcy and Insolvency Act.

Within that ceiling, you and your trustee choose the term. It is usually expressed as a number of monthly payments, often up to sixty. The Office of the Superintendent of Bankruptcy’s own 2017 review of trustee business practices uses exactly that shape, a proposal paid over sixty months, as its baseline illustration. That is the standard shape, not a measured share of real proposals.

Nothing requires a proposal to run the full five years. A shorter term is common where the payments are affordable at a higher monthly amount.

The appropriate term depends on factors such as:

• What you can realistically afford.
• The overall amount being offered.
• What creditors are prepared to accept.

A detailed explanation is available at How a consumer proposal payment is calculated. The Monthly Payment Amount calculator shows what those payments would look like for your own numbers.

The most important thing during this stage is staying current with payments.

A proposal can be deemed annulled if payments fall about three months into arrears. If that happens, the protections provided by the proposal can be lost and the debts come back.

The consequences are explained in Disadvantages of consumer proposal filings: the real consequences, fear by fear.

If financial circumstances change and adjustments may be needed, see Cancel, Get Out of, or Change a Consumer Proposal.

If a prior proposal ended and you are asking about filing again, that question has its own page: Second and Subsequent Consumer Proposals: Filing Again, and What Changes.

As a practical matter, the timeline described on this page assumes the proposal remains in good standing and payments continue as agreed.

The Last Payment and the Certificate That Ends the Proposal

A consumer proposal does not end simply because the last payment has been made.

To complete the proposal:

• All required payments must be made.
• Both counselling sessions must be completed.
• The Administrator must issue a Certificate of Full Performance, which is Form 46, and file a copy with the Office of the Superintendent of Bankruptcy.

The Certificate of Full Performance is the document that formally confirms the proposal has been successfully completed.

Keep a copy in a safe place.

One detail is easy to overlook.

If you make every payment but have not completed both counselling sessions, the certificate cannot be issued until the counselling requirement has been satisfied.

What Happens if You Pay It Off Early?

Some proposals are completed early through a lump-sum payment or accelerated payments.

Paying early shortens the payment timeline, but it does not shorten the process timeline.

For the proposal to be completed:

• The proposal must be approved, which on the ordinary path is around day 60.
• The required amount must be paid.
• Both counselling sessions must be completed.

Once those requirements have been satisfied, the Certificate of Full Performance can be issued, with no further waiting period.

So even a lump sum paid on the first day cannot produce a certificate before the proposal is approved. The two counselling sessions, which need about 40 days from filing to finish at the earliest, fit inside that same window rather than setting the floor.

Whether paying early makes sense depends on your individual circumstances.

For a fuller discussion, see How a consumer proposal payment is calculated.

After the Proposal Ends: The Credit-Report Timeline

The proposal may be complete, but another timeline continues.

This is the credit-report timeline.

How long a completed consumer proposal remains on a credit report is a separate question from how long the proposal itself lasts.

Many people accidentally combine these two timelines and conclude that the proposal remains active for longer than it actually does.

Those are different issues.

The proposal ends when the Certificate of Full Performance is issued.

Credit reporting follows its own rules and timeline.

For a detailed explanation, see Your credit after a consumer proposal or bankruptcy: R7, R9, and the honest answers.

Common Questions About Consumer Proposal Timelines