Life After Consumer Proposal: 6 Things To Do When It’s Done

You’ve finished (or almost finished) your consumer proposal. Congratulations – that’s a huge accomplishment, which you’ve been working towards for years!

Now that you’re done, you may be wondering: What does life after a consumer proposal look like? What can I be doing now to start rebuilding my credit?

Being “done” your consumer proposal means you’ve completed all the required terms of your proposal, including all payments. At this point, you’re free from any obligation to pay the balance of your debts. Just remember, although your consumer proposal has been completed, it will still appear as a line on your credit report for three years after you’re done (or six years from when you started—whichever comes first). That means it’s good to start taking steps now to improve your credit rating.

With that in mind, here are six ideas for what you should do after a consumer proposal:

1. Make sure your “Certificate of Full Performance” is recorded

When you’ve completed your consumer proposal your trustee will sign your “Certificate of Full Performance”. This document is your proof that you have met all your obligations, and you are officially released from any outstanding debts included in your proposal.

You will want to make sure that your certificate is sent to Equifax and TransUnion. This is important because you will likely see a 40-55 point increase in your credit score once it has been recorded.

Make sure to talk to your trustee about whether they will be faxing your certificate or if this is something you need to do yourself. The process is different with different trustees, so make sure you ask your trustee about this process and understand your obligations.

2. Get your credit report checked (through a credit consultation)

Unless your trustee provides follow up support to clients, once you complete your consumer proposal, your relationship with the trustee will also be finished.

However, you’ll likely still have lots of questions, from “What next?” to “How long does it take to rebuild credit after a consumer proposal?” There may be financial goals you want to reach where understanding your credit score is important.

We recommend having a consultation with a trained credit consultant. A consultation can help you identify anything on your credit report that’s negatively affecting your score, like an item in collections, and explain the options available to continue rebuilding your credit.

Working with a credit consultant is also a good way to get peace of mind by making sure there’s been no fraudulent activity and that everything is correct in your records… Unfortunately, mistakes can happen!

At Climb, we offer a free credit consultation to help you understand your credit score.

During your consultation, you’ll also receive sound advice for the next steps you can take to rebuild your credit. For example, you might benefit from using a revolving trade line, such as a credit card, or an instalment tradeline, such as a loan payment or Accelerator Plan, which will be reported every month and can help boost your rating.

3. Identify a new financial goal

Over the past five years, finishing your consumer proposal has probably been one of your top financial goals. And you made it! 

This is a major achievement, and you can enjoy the satisfaction of reaching your goal. 

But now is not the time to lose your focus. You’ve proven your ability to meet financial goals, so it’s time to look ahead and identify your next goal. 

People tend to be most successful when they have an objective in mind. After all, if you’re working towards a specific target, it’s easier to make good decisions when it comes to spending. 

Not sure what your next goal should be? It may be helpful to think about short, medium and long-term goals. Some common short-term goals might include creating an emergency fund or saving for a special purchase – now is the perfect time to start putting aside money for holiday gifts. A medium-term goal could be buying a new car or tackling a home improvement project. Thinking long-term, you may focus on saving for a house down payment or retirement. 

When you have something you’re working towards, it will be easier to avoid falling back into old habits that were limiting your financial success in the past.

4. Get advice if you’re looking for a mortgage, car loan, or line of credit

Your financial dreams after a consumer proposal may involve applying for new credit, like a mortgage for a new home or a car loan. 

You may think that life after a consumer proposal means you need to delay or let go of these plans. However, it is usually possible to get access to mortgages, car loans and lines of credit following a consumer proposal—if you know where to look. 

There are brokers who specialize in working with people who are rebuilding their credit. Do your research and look for a trustworthy and reliable broker who will be able to advise you on your options. Your goals may be more achievable than you think!

5. Resist the temptation to overspend

The consumer proposal process has likely taught you a lot about your financial habits, as well as strategies to maintain a budget. As part of your counselling sessions, you probably had to do a detailed review of income and expense statements. You’ve built a lot of knowledge over the past few years that can help you secure a brighter financial future. 

Keeping track of the money that’s coming in and where it’s going out is a great habit to keep. If you manage to continue your budget, you’ll know when you’re in danger of overspending. You’ll also be able to see more clearly how much money you can put towards your goals each month. 

6. Save the money you were putting towards your consumer proposal

During your consumer proposal, you built the habit of setting aside the money you needed to meet your obligations each month. Why not take the money you were using for your consumer proposal and put it toward your new financial goals? That way you can maintain a habit you’ve already formed—and you’ll get to reach your goals much faster. 

You can set up automatic transfers into your savings account for the same amount you were paying on your proposal or —if you’d like to rebuild your credit and save at the same time—set up a new Climb Accelerator Plan. With the Accelerator Plan, you set a goal, make monthly payments, and once you complete your term you get your saved money back. Throughout the plan, Climb reports your payments to TransUnion and Equifax which helps establish a positive payment history to rebuild your credit score. 

In Conclusion

Reaching a major milestone, such as finishing your consumer proposal, is something to be celebrated. With a blank slate, you get to decide what happens next!

If you’d like to start with a free credit consultation, we’re here to support you.


Author: Climb

Can I Pay Off My Consumer Proposal Early?

When you’re entering a consumer proposal, you’re typically looking at a 60-month term to pay it down. Five years is a long time in anybody’s life, and having an active or recent consumer proposal on your credit bureau can have a serious impact on your ability to access financial services and credit – not to mention the stress of keeping on top of your monthly payments. All of that may leave you wondering: Can I pay off my consumer proposal early?

The short answer is yes. If you have extra income and you want to pay off your consumer proposal early, you can certainly do so. 

What are the options for paying off your consumer proposal early?

You have a couple of choices when it comes to paying off a consumer proposal early. Suppose you’ve increased your monthly income (for example, through receiving a raise at work). In this case, you can amend your consumer proposal to accelerate your monthly payments and pay more each month. For example, if you’re currently paying $200 a month and you get a raise, you could up your payments to $250. You can also add smaller extra payments without amending your proposal, and these will serve to put you ahead of schedule on your consumer proposal.

If you have come into a more significant sum of money (for example, through inheritance or your tax return), you can also make a lump sum payment. So if you got $1,000 back on your taxes, you could choose to use all or some of that money to put towards your consumer proposal.

There are no penalties for paying off your consumer proposal early. The real question is, should you?

The advantage of paying off your consumer proposal early

Many people in consumer proposal are eager to get it paid off as quickly as possible for it’s own sake – it’s a major goal to achieve. Not only will you be rid of the stress of the monthly payments, but you also typically see an immediate increase in your credit score. After you finish paying off your consumer proposal, the debts you’ve been paying off will be marked as “settled” on your credit bureau. 

A consumer proposal remains listed on your credit report for three years after you finish paying off your debts, up to a maximum of six years. You’ll see another big jump in your credit score when your consumer proposal falls off your credit report.

If you pay extra money towards your consumer proposal regularly or in a lump sum, it will put you “ahead of schedule”, giving you some leeway if you need to skip a payment in the future. We would never advise a person to miss a consumer proposal payment if they can avoid it, but if you have built up extra payments with your trustee, they can use that money to cover a future payment if you need to.

For example if your proposal payment is usually $300 and you have paid an extra $500 towards your consumer proposal, the trustee can take a payment from your “extra” payments to keep you on track if you were otherwise going to miss your payment. Your monthly payment will be met and you’ll now be $200 “ahead of schedule”.

Is paying your consumer proposal off early worth it?

Most people want to pay off their consumer proposal as quickly as possible so they can get their financial lives back on track and under control… but paying off your consumer proposal off early won’t save you money. You’ll still have paid the same amount overall.

The other thing to think about as you make an early repayment plan is to remember that making extra payments won’t positively affect your credit score—additional payments on your proposal aren’t reported to the credit bureaus.

There are also risks to paying extra funds towards your consumer proposal instead of using them to build up your savings. While you may feel you have enough money to increase your payments or pay a lump sum now, if you direct your maximum cash flow to paying off your proposal, you won’t be able to access those funds for an emergency like a car repair.

We all know that life can throw us curveballs. If your circumstances change or you have an unplanned expense, will you still have enough cash to meet your expenses?

If you default on your consumer proposal, your creditors may not accept reducing your monthly payments, and you could end up filing for bankruptcy.

Making the right choice for you 

If you’re confident you can afford the extra cash towards your consumer proposal, and it’s crucial for
you to get your consumer proposal paid off early, doing so may be the right decision. 

However, Climb’s Accelerator Plan may be a better way to reach your goals. 

Imagine you have that extra $200 a month in income. Instead of using it to pay off your consumer
proposal each month, you could instead enroll in the Accelerator Plan. Every time you make a payment,
Climb reports that to the credit bureaus—helping you establish a positive payment history every

The Accelerator Plan also helps you save money for a rainy day. If you need to access your equity early,
we make it easy. If you complete your contract in full, you’ll get your equity back, and you can choose to
use it to pay off your consumer proposal early or put it towards something else. Either way, you’ll have
the added benefit of a positive payment history on your credit report. 

Learn more about Climb’s Accelerator Plan by starting with a free credit consultation with one of our


Author: Climb

Ways to Boost Your Credit Score

Your credit score is like a grown-up version of a report card, for your finances. It shows a record of how you’ve used credit like credit cards or loans in the past, and if you were able to stay on top of other bills, too.

It’s not easy to guess what goes on your credit report, or how to build a higher score. Read below to find out how to get started with improving your credit score and how to keep it high.

Pay Your Bills on Time

The biggest element in your credit score is if you pay your bills on time every month. That makes up a huge portion of your credit score. When you make a late payment, the company notifies the credit bureaus that produce your credit scores.

To make sure you aren’t paying late, set up automatic payments from your bank account for all your bills. You can pay just the minimum if you can’t afford to pay the entire statement at once.

You can also create recurring calendar reminders in your phone, calendar or planner. If you prefer getting physical reminders of your bills, sign up for paper statements to be sent to your home.

As soon as you notice a late payment, call the company and make a payment right then. Usually, a payment needs to be more than 30 days late for it to show up on your credit report.

Lower Your Credit Use

A credit score tells prospective and current lenders how you’ve used credit in the past. One of the factors that determine your “creditworthiness” is how much credit you’re currently using compared to how much you have available, also known as “credit utilization.” This makes up 30% of your credit score, so it’s an important piece of the puzzle. This mostly affects credit cards and lines of credit.

You can find your credit utilization ratio or percentage by dividing your current credit balance by the available credit limit. Look up your credit card bill and view the most recent balance and then find the total credit limit.

If your balance was $600 and your credit limit is $1,200, then your utilization percentage is 50%. That means you should pay off more of your balance or call the credit card provider to increase the limit – just remember, a higher limit doesn’t mean you should use it more! The goal is to keep your utilization below 30%, or $400 in this example.

Fix Mistakes

It’s not uncommon for your score to be low because of a mistake or error on your credit report. That might be because your identity was stolen, and someone opened a credit card in your name. It might also be because you didn’t get a bill in the mail and the lender sent the bill to collections.

Look at your credit report to see if there are any mistakes and call the lender to ask about any collections or defaults. If you find an error, try to fix it as quickly as possible. This is especially important if you’re in a consumer proposal, which is often mis-reported as a bankruptcy.

Avoid Opening New Accounts

Too many new accounts will affect the average age of your credit accounts. If possible, don’t open any new accounts unless you absolutely need it. If you have a lot of new accounts, a lender might think you don’t have enough cash on hand.

Want to talk through your credit report with an expert? Contact us for a free credit consultation.

About the Author

Zina Kumok is a trained journalist and has covered everything from professional sports to murder trials. Now, she specializes in personal finance and has written for brands and publications such as Mint, Investopedia and Discover. She paid off $28,000 worth of student loans in three years.

How to Choose the Right Secured Credit Card

Without a credit card, life can be a whole lot tougher. Whether it’s making an online purchase, renting a car, or securing a reservation, many everyday transactions seem to require a credit card, even if you have the cash in hand. 

If you’re in a consumer proposal or have a poor credit rating and fear being turned down for a credit card, don’t panic. A secured credit card may offer you the flexibility you need and a chance to get your credit score back on track. 

Want to get an expert opinion on which secured card is best for your situation? Contact us for a free credit consultation and our expert consultants will recommend the secured Visa card or secured Mastercard you’re most likely to qualify for. Note: this post contains affiliate links marked with a *. Climb may receive a commission for signups made through these links.

What is a secured credit card?

A secured credit card is a type of credit card that allows you to access the benefits of a credit card, even if you’re in a consumer proposal or you have a low credit score. 

A secured credit card, like it’s name suggests, requires a security deposit. This is usually around 1-2 times the limit you’re applying for. For example, if you’re applying for a $500 limit, you’ll give the lender $500-1000 as a deposit. 

That means the lender takes on less risk: if you fail to pay back what you owe, they’ll use your deposit to clear that debt. 

The real long-term value of a secured credit card lies in its ability to help rehabilitate your credit score. Unlike a prepaid credit card, your lender will report your payments to credit agencies, meaning using a secured credit card will build a positive payment history, which can help you improve your credit score. Having a “revolving” form of credit on your credit report is one of the best ways to rebuild your credit, especially if it’s paired with an “installment” form of credit like a Climb Accelerator Plan. Learn more about the different types of credit here, or talk to one of our credit consultants about your own credit rebuilding goals.

Factors to consider when comparing secured credit cards 

As with any financial product, it’s important to understand what you’re signing up for when you take on a secured credit card. Here are some questions you’ll want to ask. 

1. What are the fees?

It’s relatively easy to find out whether the card you’re applying for has annual fees or not. 

But look out for other hidden fees, such as fees for foreign transactions, cash advances, declined transactions or going over your limit. One popular card advertises a low annual rate but then tacks on a monthly fee. You should ask to see a full fees schedule before you commit to a card and make sure the fees will be manageable for you. 

2. What’s the interest rate?

Secured credit cards typically have higher interest rates than a standard unsecured card. However, if you intend to avoid carrying a balance on your card this may not pose too large a problem. We recommend treating your secured credit card like a debit card and paying it off in full every month.

3. How much is the deposit and what happens to it?

Most cards will have minimum and maximum deposit requirements. Make sure you can afford the minimum deposit and that you understand how the deposit relates to the amount of credit that will be available to you. 

While you use your secured credit card, you won’t have access to the funds you’ve deposited and the deposit can’t be applied to your monthly payments. However, if you’ve paid your bills on time and in full, your deposit will be refunded to you when you close your account. 

Which is the right secured credit card for me?

Making the right choice of secured credit card will depend on your financial situation. Here are some of the options available to Canadian borrowers with a comparison of their different features and benefits. 

Home Trust Secured Visa


 No Annual Fee

Other fees include:

  • Overlimit fee: $29.00
  • Dishonoured cheque fee: $45.00
  • Inactive account fee: The lesser of $10.00 or the full account balance if the account has been inactive for 360 days
  • Foreign currency conversion fees: 2%
  • ATM Charges: $2.50 for up to $250 cash advance within Canada—fees are higher internationally
Interest Rate  19.99%
Minimum Deposit  $500
Monthly Minimum Payment  3.00% or $10 (whichever is larger). 


Home Trust Secured Visa offers a great no annual fee option. The minimum deposit starts at $500 and maxes out at $10,000. The amount of credit available to you scales directly with the amount of your security deposit: so if you put $500 down, you receive $500 worth of credit

While Home Trust does require a credit check as part of their application process, the card has a high approval rating, and a low credit score is not usually associated with rejection. The catch is that you need to send a physical cheque to their office with your security deposit, which can be inconvenient.

The card offers the worldwide flexibility of the Visa brand, as well as an interest-free grace period of 21-days.  You can apply directly here.*

Home Trust Secured Visa (Annual Fee Option)


$59.00 annual fee (or $5 per month)

Other fees include:

• Additional authorized user fee: $19 annual fee (or $2 a month)
• Overlimit fee: $29.00
• Dishonoured cheque fee: $45.00
• Inactive account fee: The lesser of $10.00 or the full account balance if the account has been inactive for 360 days
• Foreign currency conversion fees: 2%
• ATM Charges: $2.50 for up to $250 cash advance within Canada-fees are higher internationally

Interest Rate  14.90%
Minimum Deposit  $500
Monthly Minimum Payment  3.00% or $10 (whichever is larger).


Almost identical to their no-fee option, the annual fee Home Trust Secured Visa has the benefit of one of the lowest interest rates available with a secured credit card. If you think you may carry your balances forward, this may be a better fit for you, so long as the fee is manageable.  You can apply for the HomeTrust Secured Visa Card here.*

Refresh Financial Secured Visa


$12.95 annual fee

$3 per month maintenance fee

Other fees include:

• Declined transaction: $0.10
• ATM Charges: $5 cash advance fee in Canada
• Overlimit fee: $5 for first time—additional times will result in the cancellation of your card
• Foreign Transaction Fees: 3.5%
• Inactive fee: $2 per month for each month you don’t use your card

Interest Rate  17.99%
Minimum Deposit  $200
Monthly Minimum Payment  Information not publicly available


Refresh Financial’s Secured Visa offers a secured credit card with a minimum deposit of just $200. It allows deposits up to a maximum of $10,000 and provides a comparable interest rate to other secured cards. This card offers a 21-day interest-free grace period on your transactions. 

This card requires no credit check and so your application is virtually guaranteed to be approved provided you meet the eligibility criteria and can provide the deposit. 

Capital One Guaranteed Secured Mastercard


$59 annual fee

Additional fees may apply

Interest Rate  19.8%
Minimum Deposit  $75-$300
Monthly Minimum Payment  Information not publicly available

Capital One’s Guaranteed Secured Mastercard promises that as long as you meet their conditions, you’ll be approved for a card. Capital One will set your credit limit and then require a deposit of either $75 or $300 based on that limit. You can increase your limit up to $2,500 by increasing the size of your deposit. 

With your Capital One Card you also receive Mastercard Global Services and Zero Liability protection for unauthorized purchases. Capital One also allows you to add an additional authorized user with no fees. 

Still have questions?

Grappling with secured credit cards when you’re in a consumer proposal can be a headache. If you have more questions about your credit score, its impact on your ability to get credit, and the options you have available to you, book a free credit consultation with one of our experts. We’ll help you explore your options and get your credit score back where it belongs.


Author: Climb

Ultimate Glossary of Consumer Proposal Terms

Are you struggling with debt and considering a consumer proposal? Have you recently entered into one? Here’s an A-Z glossary of important terms related to debt and consumer proposals to help inform and empower your decisions.

Complete List of Consumer Proposal Terms

Bankruptcy – When a person is unable to pay their debts, they may choose to file for bankruptcy. Bankruptcy is a formal process where you work with a Licensed Insolvency Trustee (LIT) and sign over all your assets (except those exempt by law) towards debt repayment. When you declare bankruptcy, payments to creditors are stopped, as are any legal actions like wages being garnished. Your first bankruptcy appears on your credit report for six years after your date of discharge and is listed as an R9 rating.

Bankruptcy and Insolvency Act – The Bankruptcy and Insolvency Act (BIA) is the Canadian act that outlines how bankruptcies and insolvencies work in Canada. It also details the roles and requirements of the Superintendent of Bankruptcy, the court, trustees, creditors, consumers and more.

Certificate of Full Performance – When you pay off your consumer proposal amount in full, your Licensed Insolvency Trustee (LIT) will complete a Certificate of Full Performance to make it official. Make sure that your Certificate of Full Performance is shared with the credit bureaus immediately since this will trigger your old debts to be marked as settled and begin the 3-year countdown until the consumer proposal is removed from your credit report entirely.

Consumer Proposal – A consumer proposal is a debt relief program authorized by the government of Canada, which is available to individuals as an alternative to bankruptcy. If you file for a consumer proposal and it’s accepted by your creditors, you’ll pay back a percentage of debts to creditors, distributed over monthly, interest-free payments usually spread over a period of five years. A consumer proposal appears on your credit report for three years after your last payment and is listed as an R7. A consumer proposal must be administered by a Licensed Insolvency Trustee (LIT).

Credit Bureau – This term can be used two ways. A “Credit Bureau” is another term for a credit reporting agency (TransUnion or Equifax). Financial industry professionals such as trustees and credit counsellors also often refer to a person’s credit report as their “bureau”.

Credit Counseling – The goal of credit counselling is to help you improve your financial situation by providing advice on various topics like how to budget your money, improve your credit score and create a plan to assist with debt repayment. There are different types of accreditation from province to province, but it’s important to check that the credit counselling agency you work with is trustworthy and their counsellors are qualified.

Credit Counselor – A Credit Counsellor is someone who provides credit counselling. There are many individuals or agencies who might advertise this service without the right education and credentials so before you commit to working with a counsellor, check to see if they’re accredited in your province.

Credit Report – A credit report (also called a “credit bureau” by some industry professionals) is a document meant to show a complete overview of your financial history. It’s important to check your credit report regularly for errors as reporting mistakes do happen. Your credit report is one of the items used by institutions when determining your eligibility for getting approved for credit.

Credit Score – A credit score is a three-digit number assigned to you by the credit bureaus, which include Equifax and TransUnion. Credit bureaus use a mathematical formula to determine your score, taking into account all aspects of your credit report. Just like your grades in school, the higher your credit score, the better it is. A higher score increases your chances of getting approved for a loan and securing a lower interest rate – but you may see a different credit score number depending where you check.  

Debt Consolidation – Debt consolidation is the act of combining multiple smaller debts together into one loan. By consolidating all of your small loans, bills and other debts into one, it allows you to focus on one monthly payment rather than managing multiple payments each month.

Equifax – One of the two major credit bureaus in Canada. If you want to request a copy of your Equifax credit report or report an error to Equifax, contact them here.

Insolvency – Insolvency occurs when an individual isn’t financially able to pay their debts on time. Consumer proposals, debt consolidation and filing for bankruptcy are all options for individuals should they become insolvent.

Installment Credit – Installment credit is a type of loan that is extended for a predetermined amount of time, which is often referred to as the term of the loan. This type of loan usually has an amortization schedule to direct the borrower to pay off the principle through fixed installment payments over several years. Mortgages, car loans and student loans are popular examples of installment credit.

Licensed Insolvency Trustee – A Licensed Insolvency Trustee (LIT) is a are federally regulated professional that individuals and businesses can turn to for advice and services when they’re facing debt problems. The goal of an LIT is to help clients make informed financial choices.

Office of the Superintendent of Bankruptcy – The Government of Canada’s Office of the Superintendent of Bankruptcy (OSB) is responsible for the administration of the Bankruptcy and Insolvency Act (BIA) and duties under the Companies’ Creditors Arrangement Act (CCAA). The OSB licenses and regulates the insolvency profession, maintains public records and statistics and more.

Revolving Credit – Revolving credit is a type of credit that replenishes (up to a limit) each time the customer pays off their debt. Credit cards are an example of revolving credit.

Secured Credit Card or Secured VISA – A secured credit card or secured VISA is a type of credit card that is backed or “secured” by a cash deposit from the borrower. This provides the lender with security if the borrower can’t make their payment. A secure credit card is usually issued to individuals with limited or poor credit history.

Secured Debt – Secured debts is a type of debt where the borrower provides collateral for the loan. This could be a cash deposit, a car (for a car loan) or a house (for a mortgage). If the borrower defaults on the loan, meaning they’re unable to repay the debt, the lender can use the collateral to repay the funds.

TransUnion – Alongside Equifax, TransUnion is the other major credit bureau in Canada. If you want to request a copy of your TransUnion credit report or report an error to TransUnion, contact them here.

Unsecured Debt – Unsecured debt is debt that doesn’t involve any form of collateral support, such as a cash deposit from the borrower or a car or house (in the case of a car loan or mortgage). In the event that a borrower defaults on the payments, the lender must seek legal action (such as having a collections agency sue the borrower to garnish wages, file a lien on property, etc.) to be able to collect the balance owed.

Author: Climb

So, You’re in Consumer Proposal – Now What?

Imagine this:

John is a 44-year-old father of three children, and he works in the technical sales industry in Toronto. His annual salary is $63,000, which – combined with his wife’s salary of $45,000 – provided them just enough to cover mortgage payments on their small Toronto home. After his father passed away, a series of challenges left John feeling like his life was falling apart: he faced additional financial stresses from funeral expenses, one of his children was getting in trouble at school and the hardships were putting strain on his already distressed marriage.

Things didn’t get easier once a divorce became imminent. There were lengthy court proceedings and high legal fees. John’s financial stresses became perilous and he had no idea how he was going to afford the required child support payments, let alone pay off his debts. John feared that he would have no choice but to declare bankruptcy, which would involve losing his home.

A bit of good news came his way when John learned about consumer proposals. This would enable him to retain his assets and clear his debts within a five-year period. He connected with a Licensed Insolvency Trustee (LIT) who negotiated manageable payments with his creditors. He no longer faced collections agencies and climbing interest rates on his debts. It was a situation John had never envisioned he’d be in, but he accepted it as his best option.

This situation isn’t an uncommon one. Financial hardships and debt loads can land on any of us – even individuals who enjoyed a high income or financial comfort. And, it’s ok. Although it can feel devastating, it is possible to bounce back.  

Here are 3 attainable and affordable ways to regain financial stability during a consumer proposal:

1. Seek Financial Guidance

Personal finances are complicated and require careful attention and knowledge to manage properly. This is even more so the case for those experiencing financial loss and hardship, including those in consumer proposal.

Most people are not equipped to manage complex personal finances, let alone maximize their financial opportunities. When in financial distress or consumer proposal, there is little room for error or financial mismanagement. Fortunately, there are professionals skilled at identifying strategies to help you optimize your financial health and plan for a secure financial future.

It’s very important to seek advice from a reputable source that’s not charging a hefty service fee or trying to sell you a product. This could be costly for you and cause you to buy into a financial option that may not be right for you.

The main takeaway here is that you don’t need to tackle your financial hardships alone and some quality guidance can give you the confidence and ability to improve your short- and long-term financial situation.

2. Understand Your Credit Score

Unfortunately, during consumer proposal, your credit rating takes a hard hit. The debts on your credit report are marked “9”, the same rating as those in bankruptcy while you’re in consumer proposal. The debts are updated to a “7”, indicating the debt has been settled, after you’ve completed your proposal. If you’re not too familiar with what makes up a credit score, check out this summary.

It’s also a good idea to regularly monitor your credit score. This enables you to identify increases and decreases in your score and spot any errors that can sometimes find their way into your report. You can request a free copy of your credit report once a year from Equifax and TransUnion, Canada’s two credit bureaus. Additionally, Canadian companies such as Mogo, Credit Karma, and Borrowell can send you free monthly updates on your credit score and rating.

3. Consider a Credit Accelerator Program

An excellent way to improve your credit score during consumer proposal is through the Climb Accelerator Plan, a program specifically aimed at helping you boost your credit score while in consumer proposal. It has the added benefit of helping you build savings for a rainy-day fund or to pay off your consumer proposal sooner, so that you can move on with your life.

Here’s how it works: Climb works with you to develop an early repayment goal customized to your budget, payment schedule and financial goals. You make pre-authorized weekly, biweekly or monthly payments that Climb reports to Equifax and TransUnion. In the meantime, your money is stored in a secure account and then returned to you as a lump sum at the end of your term.

The program is a great and affordable way to improve your credit and financial situation while in consumer proposal. There’s no upfront fee and you can customize the amount you’re saving based on your budget, with plans as low as $7/week. Learn more about it here.


As you can see, the consumer proposal is not the end of the line for you. There are steps you can take right away to improve your financial situation by rebuilding your credit score, undertaking careful financial planning and exploring your options to accelerate your progress.

Have any questions about the tips above? Contact us today and we’ll help you navigate your way to a brighter financial future.

Author: Climb

Things To Know About Consumer Proposals in 2020

Even before the coronavirus pandemic hit, there were mounting concerns about personal debt levels in Canada. While borrowing money can be part of good financial management, debt becomes a problem when it starts piling up and outpacing income.

So, what does the debt situation look like in Canada? The Canadian household debt load has been steadily rising since the early 1990s. Debt levels have spiked more recently, due largely to lower interest rates. This has been especially reflected in high levels of mortgage borrowing. What’s important to note, though, is the ratio of borrowing to household income. A recent report showed that household debt is at $1.76 for $1 of disposable income. Furthermore, Canadians are spending a record 14.96% of their income on debt payments, half of which is being directed towards interest.

Insolvencies are also on the rise among Canadians, particularly among individuals. According to Statistics Canada, consumer insolvencies increased by 13.4% in the past calendar year. It may come as a surprise, then, that the number of bankruptcies have actually decreased by 1.2% during this same period. This downward trend in bankruptcies started in 2009 and can mostly  be attributed to more favourable global economic conditions.

But there’s another reason why bankruptcies have been continuing to decline: consumer proposals. More and more Canadians are pursuing consumer proposals over bankruptcy to deal with insurmountable debt. In fact, consumer proposals increased by 17.9% in the past calendar year, coming to a total of 83,703.  

Why are More Canadians Choosing Consumer Proposals?

Both consumer proposals and bankruptcy result from insolvency, yet consumer proposals enable individuals to keep their assets, more quickly pay off debt and do less harm to their credit score. This is often appealing to those with higher incomes and with valuable assets. The bankruptcy route can result in surplus income payments and loss of assets.

A consumer proposal is a debt relief program authorized by the government of Canada available to individuals looking to avoid bankruptcy. A Licensed Insolvency Trustee (LIT) works on an individual’s behalf to negotiate with the individual’s creditors a percentage of debts to be paid. This amount is distributed over monthly payments usually spread over a period of five years. You can see why this may be an attractive option for many overburdened by debt.

Situations of insolvency, however, still cost enormous amounts of stress, time and damage to your credit rating. In a climate of alarming debt rates and worrisome debt-to-income ratios – and significant societal consumer pressures – how does one avoid hitting the red?  

How to Avoid the Downward Debt Spiral

It’s important to approach financial trends, including the spending and borrowing happening around you, with a healthy amount of caution.

For example, low interest rates may make a mortgage suddenly possible, but does that mean it makes sense for you to buy that house? Make sure to be aware of what percentage of your household income will go towards mortgage payments and interest and how long you will be paying your mortgage. And continually analyze your spending habits. Are you spending an appropriate percentage of your income on rent or mortgage payments, loans payments and personal expenses? Is there enough left over for your slush fund and your retirement savings?

Even if you don’t think you’re in a financially precarious place, it’s a really good idea to seek some solid financial planning advice. Maybe you’re doing ok, but some ongoing habits – or an unexpected major event, like we’re currently seeing with COVID-19 – could put you in a tough spot.

If You Find Yourself in Consumer Proposal…

As we explored above, insolvency and consumer proposals happen to many Canadians. And, they can happen to anyone – even those with high incomes and those who are careful with their money. Major events can happen that cause a cascade of financial duress, and eventually, unmanageable debt.

If this is you, there is good reason to foresee a better financial future. You can take action to boost your credit, save for the future and improve your financial situation right away. Doing so will maximize your short- and long-term financial health and help you move on with your life.

Make Credit Climbing Your Goal

Your credit score is like your financial report card and affords you the opportunity to qualify for loans, credit cards, a house rental and sometimes even a job. The credit scores among those in consumer proposal, unfortunately, drop very low. Nevertheless, it’s especially important to make improving your credit score a top priority during consumer proposal. By building a positive payment history during your consumer proposal, you’ll be poised to maximize your credit score when you complete your proposal.

It’s important for everyone, and particularly those in proposal mode, to keep on top of their bill payments, including to your proposal. Ensure, as well, that you avoid making out cheques with insufficient funds. It’s also a good practice to monitor your credit score and rating on an ongoing basis. This way, you can detect upward and downward movements in your score, as well as identify any possible errors. You can obtain a free copy of your credit report once a year from Equifax and TransUnion, Canada’s two credit bureaus. Canadian companies such as Mogo, Credit Karma, and Borrowell can also send you free monthly updates on your credit score and rating.

Consider a Credit Accelerator Program

If you’re eager to pay off your consumer proposal in less than five years and are interested in improving your credit and building your savings, consider the Climb Accelerator Plan.

The plan is geared towards helping those in consumer proposal boost their credit rating, while building up some savings that can be used to pay off your proposal sooner. Climb works with you to develop an early repayment goal customized to your budget, payment schedule and financial goals. You make pre-authorized weekly, biweekly or monthly payments that Climb reports to Equifax and TransUnion. In the meantime, your money is stored in a secure account and then returned to you as a lump sum at the end of your term.


With consumer proposals steadily on the rise in Canada, and more on the horizon thanks to the devastating financial impacts of the coronavirus pandemic, it’s important to be prepared and know your options. A consumer proposal is a serious situation, but it’s one you can recover from with the right actions.

Still have questions? Reach out today and our team would be happy to provide you with a free credit consultation.

Author: Climb