Many people are surprised to learn that a Consumer Proposal can be a better option for dealing with debt than Credit Counselling.

Below is a comparison of key points of differentiation between Credit Counselling and a Consumer Proposal filed with a licensed Trustee:

Consumer Proposal
VS. Credit Counselling

When it comes to options for dealing with debt, making a consumer proposal through a Licensed Insolvency Trustee can be a better choice than opting into a credit counselling program.

We’ve outlined key points comparing the two, some of which may come as a surprise:
Consumer Proposal
Credit Counselling
How Much Debt Repaid?

Total amount of debt can be reduced. Reductions of 70-80% of total debts are most common.

Interest automatically frozen by law on all debt, including tax debts and student loans.

Generally required to repay 100% of the debt.

Interest frozen by negotiation. Some creditors will not agree to an interest freeze. Tax debts and student loans will continue to charge interest.

Amount of Monthly Payment

Income levels and family size taken into account.

A Licensed Insolvency Trustee cannot file a Consumer Proposal that would result in undue hardship.



No set guidelines on maximum payment amount.

Typically higher payment terms than in a Consumer Proposal because 100% of debt is being repaid.

Administration Costs

All administration costs are included in the payment amount offered to creditors – no hidden fees.

Licensed Insolvency Trustee fees are set and regulated by the federal government.

Monthly monitoring and consultation fees, other levies may be charged in addition to monthly debt repayment.

Chargeable fees are unregulated.

Impact on Credit Rating


Both a Consumer Proposal and Credit Counselling Program will result in an R7 rating being noted for two to three years after completion.


Length of Time

Must be completed within 60 months. Terms of 24-48 months are most common.


Depends on size of debt and repayment. 5 year terms are common.

Creditor Agreement and Collections

Acceptance by 50% of voting creditors means all creditors are bound by Consumer Proposal terms and share monthly payment.

The ONLY method in Canada for reducing balance owing to Canada Revenue Agency.

Only a Licensed Insolvency Trustee can cease a wage garnishment, asset seizure and other collection action.

Contact from creditors must cease upon filing.

100% agreement by each creditor required, otherwise they must continue to be paid separately.

No ability to settle income tax debt for less than 100% of balance owing.

Creditors not in agreement with the plan may continue to pursue legal action or collection.

Creditors in agreement with the plan will typically refrain from contact while the plan is in good standing, but there is no legal authority to enforce this.

Advisor’s Qualifications

Licensed Insolvency Trustees are licensed by the federal government.

Overseen by the Office of the Superintendent of Bankruptcy.

Must comply with Code of Ethics and rules of professional conduct.

No set qualifications required to operate as a Credit Counsellor.

No regulatory body.

No dispute-resolution mechanism in place.


Contact Us for a free, confidential evaluation of your financial options.
Are creditors harassing you? Are the endless phone calls and collection letters causing you stress? Are you living on your credit cards? Are you unable to maintain your minimum payments? Are you being pursued for government debt? If you answered "yes" to any of these questions, you are not alone. In the twelve-month period ending July 2016, more than 66,000 Canadians were in the same financial position and found relief by seeing a Licensed Insolvency Trustee and filing personal bankruptcy. Another 57,000 Canadians settled their debt management problems by filing a consumer proposal.

If you are not a resident of British Columbia, more information is available about bankruptcy in Canada.

No matter what the cause of your financial difficulties, the Bankruptcy and Insolvency Act does not restrict a person from filing personal bankruptcy or making a consumer proposal. For example, you could be in financial trouble due to the loss of employment, a divorce, a leaky condo, medical problems, gambling, substance abuse, or poor money management. Regardless of the reason, filing personal bankruptcy or making a consumer proposal to your creditors is based upon your unique individual circumstances and is ultimately your personal decision. In BC, both of these remedies can only be filed by utilizing the services of Licensed Insolvency Trustees. At Sands & Associates, our Licensed Insolvency Trustees understand that most people file into bankruptcy or make a consumer proposal to creditors because of unfortunate circumstances, and we will guide you through this difficult time. 

Personal bankruptcy or a consumer proposal to creditors can provide shelter from the financial storm. Each will stop virtually all legal proceedings, garnishees, and phone calls from your creditors. These legal remedies provide a fresh start by pardoning your debts including credit card debts, lines of credit, legal bills, utility bills, medical bills, automobile insurance, judgments, government debts, etc. A Licensed Insolvency Trustee can help you understand the relative merits of each of these debt management options within BC. 

At Sands & Associates, we make filing personal bankruptcy or making a consumer proposal to creditors simple. We will arrange for a free initial consultation with one of our knowledgeable staff to discuss your financial status, and help you to determine whether bankruptcy or a proposal to creditors is the right choice for you.

Should you choose to file personal bankruptcy or make a consumer proposal to your creditors, we will process the necessary paperwork, arrange for possible meetings with creditors, provide two credit counselling sessions at our convenient offices located in Vancouver, Burnaby, New Westminster, Richmond, Surrey, Langley, Coquitlam, Maple Ridge, White Rock, Abbotsford, Chilliwack, Victoria, Nanaimo, Kamloops and Kelowna. 

After you have filed personal bankruptcy or a consumer proposal, you are required to perform your duties as outlined in the Bankruptcy and Insolvency Act. Some of the duties in a personal bankruptcy include keeping the Licensed Insolvency Trustee informed of your current address, declaring your monthly income and expenses for a minimum of nine months, attending two credit counselling sessions, and paying the Licensed Insolvency Trustee an amount that is dependent upon your income and the assets that you own. 

If this is your first personal bankruptcy, the earliest that you will be eligible for your discharge is nine months after your date of filing. A discharge from bankruptcy means that your debts will be eliminated and your creditors can no longer pursue you for the outstanding amount owed. It provides peace of mind and a chance for a fresh financial start. 

If you choose to make a consumer proposal to your creditors and if the creditors and the court accept it, the contract is binding between you and the creditors. A certificate of completion, which discharges your indebtedness, will be given as long as you meet the terms of the contract and remit the appropriate funds or assets to the Licensed Insolvency Trustee.