How Long Does It Take to Be Debt-Free with a Consumer Proposal?

When you’re stuck in debt, the question that circles your mind the most is usually “How long until this is over?” That’s exactly why so many Canadians look at a consumer proposal: it gives you a clear timeline and a predictable path to becoming debt free. And while a consumer proposal can legally run up to five years, plenty of people finish sooner depending on their situation and goals.

Consumer Proposal Timeline

A consumer proposal follows a standard structure, even though everyone’s financial picture is different.

It usually goes like this:

1. You meet with a Licensed Insolvency Trustee (LIT) to review your debt and decide whether a consumer proposal is right for you.
2. Your LIT files the proposal, which triggers a freeze on interest and stops creditors from contacting you.
3. Creditors have 45 days to vote on the proposal.
4. Once accepted, you start making your monthly payments.
5. When every payment is complete, you’re officially debt free, unless there are nondischargeable debts like student loans where the end of study date is less than 7 years ago or support arrears, fines etc.

The big appeal of a consumer proposal is knowing exactly when the finish line is coming instead of hoping minimum payments will magically make the balance disappear one day.

Typical Duration of a Consumer Proposal

Most consumer proposals land somewhere in the three-to-five-year range, mainly because five years is the legal maximum in Canada. But that doesn’t mean you’re automatically signing up for half a decade. Your timeline is built around what you can realistically afford, not a one-size-fits-all rule.

Average Proposal Length by Debt Amount

There actually isn’t an official “average” length based on how much you owe. No national database tracks it that way. But your debt amount can still shape how your proposal is set up. Bigger debts sometimes need more time to spread out the payments, and smaller debts can wrap up sooner.

What really matters is that you have up to five years to work with, and you’re allowed to finish early if things improve down the road. Your Licensed Insolvency Trustee will help structure a plan that makes sense for your life, your cash flow, and your goals.

Factors That Determine Your Timeline

Your consumer proposal timeline isn’t random. A few key factors shape how long it will take to become debt free.

Debt Amount and Composition

Generally, the more you owe, the longer your proposal might run — not as a punishment, but because your payments need to feel realistic month to month. It also depends on what creditors are willing to accept. If most of your debt is from credit cards, payday loans, or lines of credit, your proposal is usually pretty straightforward. If you have things like student loans mixed in, your Licensed Insolvency Trustee may structure things a little differently to make everything fit smoothly.

Income Stability and Amount

Your income plays a big role too. If you earn a steady amount each month, your timeline may be shorter since you can take on slightly higher payments. But if your income changes from season to season or month to month, the proposal can be stretched out a bit to keep payments manageable and stress-free.

Creditor Requirements

Different creditors may expect different repayment amounts based on their policies and your history with them. Your LIT works out a payment total that creditors are likely to accept while still fitting your budget.

Your Personal Financial Goals

Some people prefer the lowest possible monthly payment. Others want to get debt‑free as fast as they can. While your goals help shape the recommended structure of your proposal, creditors also have to agree — and their focus is on the best possible return. The right proposal balances both sides: what you can realistically afford and what creditors are likely to accept.

Can You Complete a Consumer Proposal Early?

Yes — and a lot of Canadians do. Paying off a consumer proposal early can shave years off your journey to becoming debt free.

Lump Sum Payment Options

If you receive a bonus at work, a tax refund, or financial support from a family member, you can put that toward your consumer proposal at any time. Lump sums go straight toward your balance and immediately bring you closer to the finish line.

Increasing Monthly Payments

You can also choose to increase your monthly payments if your budget improves. Even an extra $25 or $50 a month can reduce your timeline more than you might expect.

Is a Consumer Proposal Worth the Time Investment?

A consumer proposal isn’t instant relief, but it’s often dramatically faster than trying to pay down debt on your own, especially if you have high-interest credit card debt.

Time Comparison: Proposal vs. Minimum Payments

Here’s a simple example: If someone owes $30,000 at typical credit card interest rates and only makes minimum payments, they could be in debt for more than 15 years. With a consumer proposal, that same person might pay back a reduced amount over four or five years and then be debt free.

That’s why so many people choose a consumer proposal: it’s a predictable, structured path out of debt instead of an endless cycle of payments that barely move the needle.

The Bottom Line

A consumer proposal might last a few years, but it offers something most people haven’t felt in a long time: a clear end date. Unlike credit card minimum payments, a consumer proposal gives you a set timeline, a fixed monthly payment, and a guaranteed finish line where you become debt free in Canada, with a few exceptions as mentioned above.

If you want to know what your timeline would look like or whether a consumer proposal is the right path for you, Farber’s Licensed Insolvency Trustees can walk you through your options. Book a free, confidential consultation today!

You don’t have to stay stuck in debt. The right plan can take you from overwhelmed to debt free — and it all starts with one conversation.