Can I file a consumer proposal with a small amount of unsecured debt?

There is no minimum set by the Act. In practice a trustee may point you toward a lower-cost route like credit counselling if your unsecured debt and income make that a simpler fit, but a proposal is not closed off by a small total on its own.

Can I file a consumer proposal with a very large amount of unsecured debt?

There is no maximum set by the Act either. What matters is whether a payment your income can realistically sustain, over up to five years, is enough for creditors to accept. A trustee can tell you whether that math works for a large total.

Does my income level decide whether I qualify?

Income matters because it funds the payments, but it works alongside your expenses and your debt mix rather than as a standalone qualifying line. A trustee looks at what is actually left over each month, not just the gross figure.

What happens if my creditors reject the amount I can offer?

Creditors vote on a proposal, and rejection is a possible outcome. A trustee can discuss an amended offer with you, or explain the other options that remain available — rejection does not put you into bankruptcy automatically.

Does having a mortgage or a car loan disqualify me from a consumer proposal?

No. A proposal deals with your unsecured debt; a mortgage or car loan sits outside it and continues on its own terms as long as you keep up the payments on it. A trustee accounts for these separately when assessing what you can afford.

Is the first meeting with a trustee really free, no matter what I owe?

Yes. Trustee fees are set by federal regulation and are paid out of the payments made into a proposal you actually file — the first consultation, where your specific numbers are assessed, costs nothing.

A weighing-scale and threshold-gate shape with a dotted line marking a level, suggesting an eligibility checkpoint

How much debt do you need for a consumer proposal in Canada?

In short

There is no single debt amount that makes a consumer proposal fit. A Licensed Insolvency Trustee looks at your income against your expenses, the mix of secured and unsecured debt you carry, and what your creditors are likely to accept, then tells you at a free first meeting whether the option makes sense for your numbers.

Updated 2026-09-04

Is there a minimum amount of debt required for a consumer proposal?

The federal Bankruptcy and Insolvency Act, which governs consumer proposals, does not set a debt figure that makes someone eligible or ineligible. A proposal is a repayment arrangement built around what you can actually afford to pay each month, not a program you qualify for by crossing a dollar line.

In practice, someone with a small amount of unsecured debt and enough income to simply pay it off directly, or to cover it through a credit counselling arrangement, may not need a formal proposal at all — a trustee will say so rather than push you into a filing that does not fit.

Is there a maximum amount of debt a consumer proposal can cover?

This page does not state a ceiling figure. What actually limits a proposal in practice is not a legislated dollar cap but whether the payments you can realistically fund, over a period of up to five years, add up to something your creditors are likely to accept as better than the alternative.

A trustee is the person who can tell you whether a very large amount of unsecured debt is realistically fundable through a proposal, or whether bankruptcy or another route fits your numbers better — that assessment depends on your income and your specific creditors, not on this page.

What does a trustee actually look at when deciding whether a proposal fits?

A trustee is trained to weigh a small set of factors together, not any single number in isolation. The list below is what actually drives the assessment.

What goes into the assessment

Income versus expenses: Whether you have regular income left over, after reasonable living costs, to fund a monthly payment for up to five years.
Secured versus unsecured debt: A proposal covers unsecured debt. Secured debt such as a mortgage or car loan sits outside it and is dealt with separately.
What creditors are likely to accept: Creditors vote on the proposal. A trustee weighs what they are likely to accept against what a bankruptcy would otherwise pay them.
Assets and other obligations: Assets, support obligations and certain other debts can affect which route makes more sense, independent of the total dollar figure owed.

What actually happens at the free first meeting with a trustee?

This meeting is where the factors above turn into an actual assessment of your situation, and it costs nothing regardless of what you decide afterward.

What the meeting generally covers

01
You bring your full picture
A trustee will ask for a full list of what you owe, to whom, your income, and your regular expenses.
02
The trustee reviews every route, not just one
A consumer proposal is one of several options a trustee can explain — credit counselling, debt settlement, or bankruptcy may fit better depending on your numbers.
03
You get a realistic payment estimate
If a proposal looks like a fit, the trustee works out a payment level your income can realistically sustain before anything is offered to creditors.
04
You decide whether to proceed
Nothing is filed at this meeting. You leave with an assessment and decide separately whether to move forward with the trustee.

How does the decision compare with choosing bankruptcy instead?

The debt total is only one input on each side of this comparison — what your income can fund and what you would keep or surrender matter just as much.

Consumer proposal versus bankruptcy, by what drives the choice

	Consumer proposal	Bankruptcy
What mainly drives the fit	Whether your income can fund a payment creditors will accept	Whether you have income or assets available to fund a proposal at all
Assets	Generally kept, as part of what you negotiate	Assets above provincial exemption limits are generally surrendered
Who has to agree	Creditors vote; enough of them must accept	No creditor vote is required to proceed
Who files it	Only a Licensed Insolvency Trustee	Only a Licensed Insolvency Trustee

What mainly drives the fit


Consumer proposal: Whether your income can fund a payment creditors will accept
Bankruptcy: Whether you have income or assets available to fund a proposal at all

Assets


Consumer proposal: Generally kept, as part of what you negotiate
Bankruptcy: Assets above provincial exemption limits are generally surrendered

Who has to agree


Consumer proposal: Creditors vote; enough of them must accept
Bankruptcy: No creditor vote is required to proceed

Who files it


Consumer proposal: Only a Licensed Insolvency Trustee
Bankruptcy: Only a Licensed Insolvency Trustee

Why does the mix of secured and unsecured debt matter so much?

A consumer proposal only reaches unsecured debt. If most of what you owe is a mortgage or a car loan, a large total debt figure can be misleading — the proposal amount that matters is what is left once secured obligations are set aside, and that number can be very different from the headline total.

This is one reason a debt figure quoted in isolation, without knowing the split between secured and unsecured, tells you very little about whether a proposal fits — and why a trustee asks for the full list rather than a single total.

What effect does a consumer proposal have on your credit file?

A consumer proposal is a public filing reported to the credit bureaus. The Financial Consumer Agency of Canada describes it as being removed three years after all the debts included in it are paid off, or six years after signing, whichever comes first — a separate timeline from the debt amount itself.

What if a trustee says a consumer proposal is not the right fit for you?

That is a normal outcome of the first meeting, not a dead end. The same trustee, or a non-profit credit counsellor, can walk through the other routes — a debt management plan, debt settlement with a licensed company, or bankruptcy — so you can compare them against the same numbers rather than guess from a general guide.

See which of these fit me

Frequently asked questions

Can I file a consumer proposal with a small amount of unsecured debt?: There is no minimum set by the Act. In practice a trustee may point you toward a lower-cost route like credit counselling if your unsecured debt and income make that a simpler fit, but a proposal is not closed off by a small total on its own.
Can I file a consumer proposal with a very large amount of unsecured debt?: There is no maximum set by the Act either. What matters is whether a payment your income can realistically sustain, over up to five years, is enough for creditors to accept. A trustee can tell you whether that math works for a large total.
Does my income level decide whether I qualify?: Income matters because it funds the payments, but it works alongside your expenses and your debt mix rather than as a standalone qualifying line. A trustee looks at what is actually left over each month, not just the gross figure.
What happens if my creditors reject the amount I can offer?: Creditors vote on a proposal, and rejection is a possible outcome. A trustee can discuss an amended offer with you, or explain the other options that remain available — rejection does not put you into bankruptcy automatically.
Does having a mortgage or a car loan disqualify me from a consumer proposal?: No. A proposal deals with your unsecured debt; a mortgage or car loan sits outside it and continues on its own terms as long as you keep up the payments on it. A trustee accounts for these separately when assessing what you can afford.
Is the first meeting with a trustee really free, no matter what I owe?: Yes. Trustee fees are set by federal regulation and are paid out of the payments made into a proposal you actually file — the first consultation, where your specific numbers are assessed, costs nothing.