A consumer proposal is an offer made by a debtor to his or her creditors to modify his or her payments. For example, you may propose that you will pay a lower amount each month, but over a longer period of time. Or you may propose that your creditors accept being paid a percentage of what you owe.

Your unsecured creditors will not be able to take legal steps to recover their debts from you (such as seizing property or garnisheeing wages) unless the proposal is withdrawn, rejected or annulled or until the administrator is discharged where the proposal was not fully performed (except for debts which would not be released in a bankruptcy by an order of discharge).

Any natural person who is insolvent, including a bankrupt, whose debts are less than $75 000, excluding a home mortgage, can make a consumer proposal.When a bankrupt wishes to make a proposal, it must first be approved by the inspectors and the bankrupt must have obtained the assistance of a trustee who will be the administrator of the consumer proposal. If the debts are more than $75 000, the proposal will be made under Division I of Part III of the Act.

It is possible to make a joint consumer proposal. Two or more consumer proposals may be joined where they could reasonably be dealt with together because of the financial relationship of the consumer debtors involved. It should be noted that a joint consumer proposal will be available to consumer debtors who do not have total debts exceeding $75 000.