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How Much Debt Do You Need to Qualify for a Consumer Proposal in Alberta?
- Priya Gupta
- Aug 12
- 4 min read
If you’re losing sleep over debt, you might be wondering: "How bad does it have to get before I can get real help?”
The truth is, you don’t need to be buried under hundreds of thousands of dollars of debt to qualify. You might already meet the requirements and not even realize it.
One of the most common questions we hear at SCB Debt Solutions is: “How much debt do I actually need to file a consumer proposal?” To qualify for a consumer proposal in Alberta, you need to owe at least $1,000 in unsecured debt, but not more than $250,000 (excluding your mortgage).
What is a Consumer Proposal?
A Consumer Proposal is a formal, legally binding agreement negotiated by a Licensed Insolvency Trustee that allows you to settle your debts with your creditors - typically for less than what you owe. It allows you to negotiate to pay back a portion of your unsecured debts, typically reducing the total amount you owe and/or extending the repayment period, up to 5 years.
Once the proposal is filed and accepted, collection calls stop, interest charges freeze, and you only make one manageable monthly payment. However, this solution isn’t for everyone. There are qualifications and criteria that need to be met, including the amount of debt you’re carrying.
What is the Minimum Debt Required for a Consumer Proposal in Alberta?
In Alberta and across Canada, the minimum amount of debt required to file a Consumer Proposal is $1,000 of unsecured debt.
Unsecured debts include:
Credit card balances.
Personal loans.
Payday loans.
Lines of credit.
Unpaid bills or taxes to CRA.
However, in practice, most people filing for a Consumer Proposal carry significantly more than $1,000 in debt.
Why?
Lower debt levels can often be addressed with less formal solutions like budgeting adjustments, credit counselling, or debt consolidation loans.
Typically, a Consumer Proposal becomes a more viable option if you owe:
At least $10,000 or more in unsecured debt.
You’re struggling to keep up with minimum payments or are being contacted by creditors.
What is the Maximum Debt Limit for a Consumer Proposal?
There’s also a ceiling to the amount of debt you can include in a Consumer Proposal. In Alberta, the maximum unsecured debt limit is $250,000 per individual, excluding any mortgages on your primary residence.
If your total unsecured debts exceed this limit, you may need to explore alternatives such as a Division I Proposal or personal bankruptcy.
If you’re married or in a common-law relationship, there is also the option of filing a joint Consumer Proposal if your debts are shared or similar in nature. In that case, the combined unsecured debt must be less than $500,000.
Also Check:
Am I Eligible for a Consumer Proposal in Alberta?
Aside from the debt threshold, there are other qualifications to keep in mind if you’re wondering: “Am I eligible for a Consumer Proposal in Alberta?”
To qualify, you must:
Be insolvent, meaning you owe more than $1,000 and are unable to pay your debts as they become due.
Have a stable source of income to afford the proposed monthly payments.
Be a resident of Canada or have property in Canada.
Do not exceed the $250,000 unsecured debt limit (excluding your mortgage).
If these criteria sound like they match your situation, SCB Debt Solutions can help.
A Licensed Insolvency Trustee will assess your finances and determine whether a Consumer Proposal is the best path forward.
Why Work with a Licensed Insolvency Trustee?
A Consumer Proposal is a federally regulated process that must be filed through a Licensed Insolvency Trustee (LIT). An LIT is trained and licensed by the Government of Canada to assess your financial situation, explain your debt relief options, and help negotiate with your creditors on your behalf.
Next Steps:
Contact SCB Debt Solutions for a free, no‑obligation debt assessment.
We’ll help you calculate exactly where your debts fall within these thresholds.
Together, we’ll craft a plan tailored to your unique financial situation and negotiate with your creditors on your behalf.
Key Highlights:
Criteria | Requirement |
Minimum unsecured debt | $1,000 |
Maximum for a single applicant | Less than $250,000 |
Maximum for joint proposal | Less than $500,000 |
Other criteria | Insolvency, after steady income, or access to a lump sum. |
FAQs on Consumer Proposal Limit
What happens if my debt is slightly over the $250,000 limit?
If your unsecured debt exceeds $250,000 (excluding your principal residence mortgage), you may not qualify for a standard consumer proposal. However, you could explore a Division I Proposal, which is also a debt solution under the Bankruptcy and Insolvency Act but involves a slightly more complex process and may require court approval. Our team of professional Licensed Insolvency Trustees can help you determine which option fits your situation best.
Can my spouse and I file a joint consumer proposal?
Yes. If you and your spouse (or another close family member) share a significant portion of your debts, you can file a joint consumer proposal. Your combined unsecured debts must be less than $500,000, and the majority of your debts should be joint or similar in nature. A joint proposal can simplify the process by consolidating payments and reducing administrative costs.