Can You Pay Off a Consumer Proposal Early?

You have made the decision to file a consumer proposal.  Your immediate concerns are stopping the harassing phone calls and then waiting with your fingers crossed to find out if your creditors have accepted your proposal.  The last thing on your mind is whether or not you can pay off a consumer proposal early.

Once you file your proposal you will feel relief knowing that your creditors will stop calling and you no longer have to juggle your bills.  Lucky for you almost all proposals are accepted so assuming that yours is accepted the next step is to buckle down and learn to live on a budget.

Adjusting to life without credit can take a few months.  Once you have adjusted to your new budget you may begin to look at the future and rebuilding your credit.  You may wonder if you can pay off a consumer proposal early.

You are allowed to pay off a consumer proposal early.  The biggest advantage to doing this is that your proposal information will purge from your credit report sooner which will help rebuild your credit score quicker.  There are several methods you may consider to pay off a consumer proposal early:

Biweekly payments

If your proposal payment is $200 a month for 36 months you may consider paying $100 biweekly instead of $200 a month.  By opting to pay $100 biweekly you are actually making one extra monthly payment per year.

Slightly Higher Payments

If your proposal payment is $200 a month for 36 months you may consider paying $225 a month instead.  By opting to pay $25 extra per month you are actually paying an extra $300 per year.  To pay off your proposal even quicker you can combine this method with the bi-weekly method.

Lump Sum payments

If you receive a tax refund or a bonus from work consider making a lump sum payment which will reduce the length of your proposal.

Another advantage to filing a proposal is that you are not required to report your income to your trustee.  If you earn more money or pick up a part time job during your proposal you will find it easier to pay off your proposal faster.

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2 thoughts on “Can You Pay Off a Consumer Proposal Early?

  • Ellen Echelke

    I am a creditor with a judgement on our debtor’s home. I want to keep the judgement in case he decides to sell his house. What are the rules

    • Ted Michalos

      If you are an Execution Creditor then you may have a Writ registered with the Sheriff’s office. The Writ is not enforceable during a consumer proposal and once the proposal has been completed the underlying debt will be discharged and the Writ will no longer be valid. You need to discuss this with your own lawyer if you’d like a more specific answers based on the facts of your own situation.


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