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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

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