A Consumer Proposal and Your House

A common question, and one we are not licensed to answer. Here is who is.

People ask whether a consumer proposal or bankruptcy will save the house. It is a fair question and it is genuinely important — and it is also outside our lane, which is worth saying plainly rather than hedging.

Who can actually advise you

In Canada, only a Licensed Insolvency Trustee is licensed to administer consumer proposals and bankruptcies and to advise you on them. Not us, and not anyone else who is not an LIT, however confident they sound.

An initial consultation with an LIT is usually free. If insolvency might be part of your picture, that call is the correct next step and it costs nothing.

The one thing worth understanding first

A mortgage is secured debt — secured against your home. Credit cards, lines of credit and most personal loans are unsecured. Insolvency processes treat those two categories differently, and that distinction is why the answer is not simple.

Understanding that difference before your appointment will make the conversation far more useful.

Why it can still be relevant

Sometimes the mortgage is affordable and everything else is what is drowning the household. Where that is true, addressing the unsecured debt can change what is affordable — which is a real possibility worth exploring with someone qualified.

Sometimes the mortgage itself is the problem, and no amount of restructuring elsewhere fixes it. An LIT will tell you which situation you are in.

What to bring to that conversation

A payout figure from your lender. Your title, showing everything registered against the property. A list of all your debts, secured and unsecured. Your income. Any court documents you have been served with.

The better the picture you bring, the more concrete the advice.

Do not take insolvency advice from anyone else

Including from us, from a cash buyer, from a "debt consultant", or from anyone charging a fee to refer you to a trustee. LITs are federally licensed, publicly listed, and you can approach one directly.

And do not rule yourself out in advance. People assume they are too far gone, or not far enough. The free consultation exists precisely so you do not have to guess.

Questions people ask

Will a consumer proposal stop my foreclosure?
That is a question for a Licensed Insolvency Trustee, who is the only person licensed to advise on it. The consultation is usually free.
Why will you not tell me?
Because only LITs may advise on insolvency in Canada. Anyone else offering an answer is going beyond what they are permitted to do.
How do I find a Licensed Insolvency Trustee?
They are federally licensed and publicly listed, and you can contact one directly. You never need to pay anyone a fee to be referred.

General information about the Alberta foreclosure process — not legal or financial advice, and nothing here guarantees an outcome. Every file is different.

Working with licensed Alberta real-estate professionals. Foreclosure Help Alberta is an education and referral service — we are not a law firm and we do not provide legal advice.