Alberta Consumer Proposal

From 2009 through 2011, consumers throughout Canada reduced their borrowing, and the annual increase in average consumer debt dropped nearly eight percentage points during that period. While many economists viewed this as a positive trend, the trend was short-lived. During 2012, consumers in Canada added greatly to their credit card debts and other consumer loans, and the average Canadian increased his or her debt by 6 percent.

Several provinces, however, experienced a jump in consumer debt that was much greater than the 6 percent average increase. Consumers in Alberta increased their borrowing more than the residents in any other province or territory of Canada, adding just over 11 percent to their debt. As of the beginning of 2013, the average Alberta consumer debt stood at about $37,400.

This rapid increase is cause for alarm, especially since the greater one’s debt, the more difficult it is to pay it off. Interest charges rise on growing consumer debt levels, and many residents are finding themselves unable to meet their minimum consumer debt payments. There are many solutions, however, to help you get your debt under control, including the consumer proposal. Alberta residents who are struggling to pay their bills may want to consider this debt payment option.

What Is an Alberta Consumer Proposal?

A consumer proposal is an agreement made on your behalf with your creditors to settle your debts and create a schedule to pay them off. Consumer proposals are binding legal agreements that clear much of what you owe and set you up with an affordable way to pay the amount of debt your creditors have not forgiven. To qualify for a consumer proposal in Alberta, you must:

• be unable (for any reason) to make your payments as they become due, or you stop making your payments as they come due

• owe less than $250,000 to your creditors ($500,000 for married couples)

• have an insufficient amount of assets that can be used to satisfy your debt

• hire a licensed bankruptcy trustee to mediate with creditors on your behalf

An approved consumer proposal becomes binding on all your creditors if creditors representing at least 51 percent of your total indebtedness agree to the plan.

The Main Alberta Consumer Proposal Pros and Cons


• The fees and other costs associated with a consumer proposal are far less than those associated with bankruptcy for many Canadians.

• Debt collectors will stop harassing you when you sign a consumer proposal.

• Your physical assets are protected in a consumer proposal.

• A consumer proposal forces obstinate creditors to work with you when lenders representing 51% of your debt agree to the plan.


• Though more affordable than a bankruptcy, a consumer proposal has the same negative effect on your credit as a bankruptcy, and it remains on your credit report for up to seven years.

• If 51 percent of your creditors deny the proposal, it does not go into effect.

• Bankruptcy trustees are required to pay your creditors as much as possible.

Find Out More about a Consumer Proposal in Alberta

You should know that a consumer proposal is not the only option for settling your debt for less than what you owe.

In fact, a quality debt settlement program or credit counselling can provide many of the same results without as negative an impact on your credit. Fill out the quick debt relief form for more information and find out whether or not a consumer proposal is right for you.