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What is the Role of a Consumer Proposal Administrator?

what is a consumer proposal administrator?

Key Takeaway

A Consumer Proposal Administrator can only be a Licensed Insolvency Trustee who administers consumer proposals in Canada. They work with the debtor to prepare the required documents and monitor their performance with the terms of the proposal while also reviewing creditors' claims and distributing dividends to them.

If you are seeking relief from your debts, a consumer proposal is a popular option to obtain relief. Essentially, by filing a consumer proposal, your creditors will stop the interest and collection activity on your debts, and you agree to repay a manageable amount to your creditors within five years.

However, if you choose to use this option for your debts, you can't do it alone but instead will need to contact a Licensed Insolvency Trustee who can act as your Consumer Proposal Administrator.

What is Consumer Proposal Administrator?

A Consumer Proposal Administrator is responsible for administering consumer proposals in Canada. This duty can only be performed by a Licensed Insolvency Trustee, which is federally regulated by the Office of Superintendent of Bankruptcy (OSB). Licensed Insolvency Trustees can also service personal bankruptcies and division one proposals. Anyone else, including accountants or lawyers, claiming to assist in consumer proposals is not a Consumer Proposal Administrator.

Unlike debt consultants, Licensed Insolvency Trustees are licensed and regulated by the OSB, ensuring that the debtor is explained all their options and that creditors can trust that the process is handled fairly for everyone involved.

What are the Duties of a Consumer Proposal Administrator?

The Consumer Proposal Administrator has several responsibilities to oversee the consumer proposal process, from meeting with the debtor to filing paperwork to collecting and disbursing funds to creditors. Below are a summary of the administrator's responsibilities:

Conduct Initial Assessment

Before filing a consumer proposal, you must meet with a Licensed Insolvency Trustee who will review your financial situation and ensure you know the options for reducing your debt, such as a consumer proposal or bankruptcy. They are available to discuss each option's pros and cons and answer all your questions.

File Consumer Proposal

The Consumer Proposal Administrator will ask you to provide all the necessary information to confirm your assets, liabilities, and income. The Administrator will then review the debtor's information and prepare the required documents to sign to ensure all the information is correct. They will then send these documents to the OSB, which will make the consumer proposal official and provide a unique identification number for the proposal to the Administrator.

Notify Creditors

After filing a consumer proposal with the OSB, the Administrator will have ten days to send to all known creditors a copy of the consumer proposal and the documents for creditors to file a claim in the consumer proposal. The Administrator will also send a copy to the debtor.

The Consumer Proposal Administrator is responsible for responding to creditors' inquiries. If creditors require more information about the consumer proposal or need help identifying the debtor's account, they will contact the Consumer Proposal Administrator, not the debtor.

Negotiate Offer with Creditors/Meeting of Creditors

The Consumer Proposal Administrator will review all proof of claims filed by the creditors and either allow or disallow the claim. After 45 days from the initial filing date, the Administrator will determine if the creditors have voted greater than 50% to accept the proposal and if enough creditors have requested a meeting of creditors. If a meeting of creditors needs to be called, the Administrator may commence negotiations between the creditors and the debtor to come to an acceptable payment amount for both sides.

The Administrator relays information from both sides to help reach an agreement to accept the consumer proposal. This may include an increase in the total payments of the consumer proposal, which will require the proposal to be amended before the creditors change their votes in favour of it.

Collect and Disburse Money

Another responsibility of the Consumer Proposal Administrator is to collect the payments from the debtor in a trust account. Typically, the payments are made monthly by the debtor and are held in the trust account until a certain balance is reached. Once this amount is reached, the Administrator will issue dividend cheques to all proven creditors. The creditors will receive a pro-rata share of the total dividend payment based upon their proven claim as a percentage of all proven claims.

Monitor the Performance of Consumer Proposal

To ensure the consumer proposal is performed as agreed to by the debtor and their creditors, the Consumer Proposal Administrator is responsible for monitoring the performance of the consumer proposal. The primary responsibility to monitor is whether the debtor is keeping up with the agreed payment schedule. In consumer proposals, debtors agree to not fall behind three months in payments, or their consumer proposal will be deemed annulled or cancelled. Therefore, the Administrator will keep track of missed payments, and if three or more payments are missed, they will notify all creditors that the consumer proposal has been deemed annulled.

Amend Consumer Proposal

If the debtor finds the terms of the consumer proposal too challenging to maintain, they can speak with the Consumer Proposal Administrator about amending the terms. The Administrator will review the debtor's current financial situation and could prepare an amended consumer proposal to send to the debtor's creditors to change the terms of the proposal.


The Consumer Proposal Administrator has many responsibilities for preparing, filing, monitoring and finalizing consumer proposals. They are integral for the consumer process to be successful and ensure all parties are treated fairly.

If you plan to file a consumer proposal, you must seek a Licensed Insolvency Trustee to act as your Consumer Proposal Administrator. It is recommended that you look for an Administrator who you feel comfortable with and who will be responsive to your questions.

Litvack Group as a Licensed Insolvency Trustee and Consumer Proposal Administrator, would be happy to provide a Free Consultation to discuss your financial situation and review whether a consumer proposal is a suitable option for reducing your debts.



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