Credit Cards and Consumer Proposals

Credit card bills are one of the most common types of debt consumers seek solutions for, and a Consumer Proposal can be a smart option for Canadians to clear their debt without taking out a consolidation loan.

Working with a Licensed Insolvency Trustee in your province, you can file a Consumer Proposal that can:

• Consolidate virtually all your debts without borrowing
• Cut the amount of debt you must repay in order to consider your debts fully settled
• Stop all future interest charges
• Save you money long-term, and reduce your immediate monthly debt payments
• Give you breathing room from your debts and creditors and full protection against any future collection actions

Read on to learn how credit card debt consolidation works in a Consumer Proposal, and other common questions people have when it comes to credit cards and Consumer Proposals.

What Happens to Credit Cards During a Consumer Proposal? 

A Consumer Proposal can include virtually all types of debt, from credit cards to payday loans, government debts and more. After reviewing your situation with a Licensed Insolvency Trustee, your Trustee will work with you to draft a repayment offer to your creditors:

• Consumer Proposals typically cut your total debts by up to 50-80%, with interest-free, manageable monthly payments over a period of up to five years.
  • Example: If you were carrying $20,000 of total debt, a Consumer Proposal could reduce this total by 70%, which would leave you with a monthly payment of just $125 per month for 48 months to be debt-free.

When your Consumer Proposal is signed, you’ll surrender the credit cards included in your Consumer Proposal to your Licensed Insolvency Trustee.

• Your Licensed Insolvency Trustee will communicate with your creditors about your Consumer Proposal and will handle all the administration requirements.
  • Card issuers and other creditors are not allowed to continue contacting you for payments, including collections, once your Consumer Proposal is filed.
• All you need to do is fulfill the terms of your Consumer Proposal, which generally consist of making regular (i.e. typically monthly) payments and attending two, one-on-one, financial counselling sessions. 

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– Lisa Tondu

Sands & Associates greatly helped me with my credit card debt by showing me a better way of dealing with paying off my debt. They are a friendly and considerate. Omer and Catherine were great and explained everything thoroughly. I would recommend them 100% – Lisa Tondu – 11 hours ago 

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– William Smillie

Omar Ali Shams was very understanding, thorough and kind. Explained my options clearly, carefully and expertly. Was very thorough and the process was made less stressful with Omar’s assistance. Thank you – William Smillie – 13 hours ago 

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– himanshu maheshwari

⭐⭐⭐⭐⭐⭐⭐ Honestly, if I could give more than 5 stars, I would.

Shelby and Christie at Sands & Associates were both very helpful throughout my entire consumer proposal process. Shelby, in particular, really stood out for me—she was incredibly kind, patient, and easy to talk to. She took the time to walk me through everything step by step and made a stressful situation feel much more manageable.

Christie was also supportive and helpful whenever I needed guidance along the way, and together they made the whole process feel smooth and well-organized.

Overall, I never felt rushed or confused, and everything was explained clearly so I could actually understand what was happening. I’m really grateful for their help and would definitely recommend Sands & Associates to anyone dealing with debt or looking for financial guidance. – himanshu maheshwari – 14 hours ago 

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– Amanda Flower

I had fell into a very stressful and challenging time financially with three children to support. The team at Sans and associates were very helpful and non-judgmental. They were empathetic and helped me through all of my options and support supported me on whatever decision was best for us. Things have been much easier since doing the consumer proposal. They’ve also provided us with financial counseling to help go over how to manage money and all of our options to rebuild our credit. – Amanda Flower – 15 hours ago 

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– Sahibpreet Singh

I had a great experience with Sands & Associates. Michelle Santos was very helpful, professional, and understanding throughout the process. She took the time to explain everything clearly and made sure I understood all my options. Her patience and support helped reduce a lot of stress during a difficult time. I truly appreciate the excellent service and would highly recommend Sands & Associates to anyone looking for financial guidance or filing a consumer proposal. – Sahibpreet Singh – 16 hours ago 

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– Sheila Delgado

The Sands Associates Company- Larissa Malancu contacted me and explained me well the details how to apply the consumer program/ bankruptcy. All the information that I have been asked had been all answered. I really recommend here very approachable and so nice. I really appreciate the time talking with her. Thank you and God bless 🙏 – Sheila Delgado – 1 day ago 

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– Pramita Banerjee

Sand & Associates has truly been a saving grace for me. The entire process was incredibly fast, smooth, and straightforward—honestly, I was surprised by how easy they made it.

When I first reached out, I was feeling overwhelmed and stressed by my financial situation. I was paying an outrageous 49.99% interest rate on a $6,000 loan, and it felt like there was no way out. From the very beginning, the team at Sand & Associates made me feel supported, safe, and confident that things could get better.

Thanks to their help, my debt has been consolidated into a much more affordable payment plan, which has significantly reduced my financial stress and given me peace of mind.

A special thank you to Radhika, who guided me through every step of the process. She was knowledgeable, compassionate, and always available to answer my questions. I am truly grateful for her support and kindness, and I thank her from the bottom of my heart.

I highly recommend Sand & Associates to anyone who is struggling with debt and looking for a professional, caring team to help them regain control of their finances. – Pramita Banerjee – 1 day ago 

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– Nicole K.

10/10 dealing with these folks. Very non-judgemental and caring atmosphere. Extremely efficient in responding to requests and easy to understand options. Thank you so much for helping in my time of need, very grateful to have folks like you at the other end of the phone. – Nicole K. – 1 day ago 

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– jordyn layton

Great company, very reliable and non judgmental. Stephanie was great to work with. – jordyn layton – 1 day ago 

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– Frogger

Very understanding no judgment. – Frogger – 1 day ago 

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Can You Keep a Credit Card with a Consumer Proposal? 

If you have an existing credit card with a zero balance that is not being included in your Consumer Proposal, you generally can keep it. You are only required to surrender credit cards to the Trustee if there is a balance owing on the card. It is important though to discuss all your credit accounts with your Licensed Insolvency Trustee.

If you keep a credit card during your Consumer Proposal, it’s essential to manage your credit card use well:

• Make all your required payments on time, every time.
• Avoid carrying a balance on your card and especially avoid accumulating new debt.
• We recommend keeping your credit limits below $1,000, depending on your income and household situation.

Can I Get a Credit Card After a Consumer Proposal?

You can get a new credit card both after your Consumer Proposal is filed and still active, and after your Consumer Proposal is finished. There are a few options to consider:

• Secured Credit Card: This is usually the best option for a new credit card if your Consumer Proposal hasn’t been paid off yet, or if your Proposal has only recently been completed. A Secured Credit Card requires you to place a ‘deposit’ with the credit grantor so that there is no risk to the card issuer of not being able to collect on future purchases.
  • Opt for a secured credit card that reports the card information to credit bureaus, as this can help establish your credit history.
• Prepaid Credit Card: A good option to have the convenience of a credit card even if you have a low credit score, but it won’t help reestablish your credit history. Watch out for high fees and transaction costs! In general, a secured credit card is a better option for most situations.
• Standard Credit Card: A good option that may be available through mainstream lenders within a year of your Consumer Proposal being finished, if not sooner.
  • Thoroughly read all the terms and conditions of the card before committing.

There are no restrictions on applying for new credit at any point, and your Consumer Proposal filing will come off your credit history three years after your Proposal is finished, or six years from the date it started, whichever is soonest.

• Many people worry that they’ll have difficulty getting credit after a Consumer Proposal or other debt repayment plan, but your credit history is always changing, and, with the right actions, you could have a positive credit rating in as little as two to three years.
• Your Licensed Insolvency Trustee will provide you with specific resources and strategies on credit building and steps to follow after your Consumer Proposal is complete.

Consumer Proposals Make Credit Card Debt Consolidation Affordable

Consolidating credit card debt with a loan can look very different to consolidating credit card debt in a Consumer Proposal. It’s important to realistically take stock of your financial situation and assess clearly your ‘wants’ and ‘needs’ when it comes to any debt consolidation or repayment plan. Please consider the following when evaluating your debt consolidation options:

• Total Cost of Consolidating
  • How do the interest charges add up over your repayment term?
  • Are there costs such as administration charges, loan brokerage fees, penalties, etc.?

Consumer Proposals are an interest-free debt repayment option, and there are no added administration fees. If your debt is reduced down to 30% of the total balance, all that you pay is that amount, there are never any additional fees charged to you.

• Monthly Payment
  • Can your budget comfortably, consistently support your monthly payment?
  • Are there additional debts besides credit cards that will still need to be paid separately?

Compare Your Debt Options

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Consumer Proposals are a flexible debt consolidation option that can include virtually all of your debts. Monthly payments are tailored to your situation and – most powerfully – you only need to repay an affordable amount of your total debt taking into account your personal and family situation.

Get Help with Credit Card Debt 

Dealing with a debt problem and comparing debt solutions can be overwhelming. Sands & Associates’ Licensed Insolvency Trustees are here to help you understand your situation and explore all of your options together, so you can make an informed decision about how you want to move forward.

• Our caring, non-judgmental Licensed Insolvency Trustees work with people across BC, and our full suite of debt help services is accessible online, by telephone, and in-person at local offices.
• Confidential consultations are always free, and without any obligation to continue working together.

Take 30 minutes to explore your options with a Licensed Insolvency Trustee and get a debt-free plan that’s right for you.