A person standing at a crossroads on asphalt with white arrows pointing left and right and a question mark in the middle, symbolizing the decision between consumer proposal alternatives offered by Money Mentors.

Explore Alberta Consumer Proposal Alternatives

Getting out of debt can feel a bit like being at a crossroads with multiple paths in front of you. One path might lead to bankruptcy, while another leads to debt consolidation. A path that many people choose is that of a Consumer Proposal. But is this the right option for you? What about the Orderly Payment of Debts path, or the Debt Management Plan route? It can be overwhelming knowing which way to go. But don’t worry, that’s what Money Mentors is here for. The most important thing you can do is know where each path leads. That way, you can make an informed decision, and know that you have made the right choice for you.

Reading this blog is a great first step towards choosing the path that best suits your debt management journey. If you live in Alberta, an even better move is to chat with one of our unbiased, AFCC certified credit counsellors – and it’s free! If you’re pondering over how to repay your debts, why not book a free consultation today?

AFCC Accreditation Logo

All credit counsellors at Money Mentors must have the Accredited Financial Counsellor Canada (AFCC) certification. This ensures financial practitioner expertise in the financial counselling industry while abiding by the Professional Code of Ethics and Standards.


OK, let’s dive in! We’re going to explore the various alternatives to a Consumer Proposal. Our goal is to help you grasp these options fully. We want to guide you to a choice that not only tackles your immediate financial worries but also lays the groundwork for your long-term financial health and stability, eventually leading to a debt-free life.

Why You Should Avoid Filing a Consumer Proposal

In exploring debt relief options, one should approach consumer proposals with caution. Although they offer immediate protection from creditors and can reduce overall debt, the hidden costs, including trustee fees, and the significant impact on credit scores, should not be overlooked. With strict eligibility criteria and potential long-term financial implications, it’s crucial to consider whether the immediate relief is worth the future challenges, making a thorough assessment of its pros and cons essential before proceeding.

For a more in-depth look at why you might consider avoiding a consumer proposal, check out our blog post: The Pros and Cons of a Consumer Proposal in Alberta

Informal Alternatives to a Consumer Proposal

When exploring ways to manage and overcome debt, it’s important to consider informal alternatives to a Consumer Proposal. These options, less formal and more flexible, can provide viable solutions for those who might be in the early stages of repaying their debts.

Debt Consolidation Loan

Debt consolidation loans offer a streamlined approach to debt management. By combining various debts into a single loan with potentially lower interest rates, this option simplifies repayments and can improve financial management. When you opt for a consolidation loan, a financial institution evaluates your credit score, income, and overall debt load. A key advantage is the potential reduction in interest rates, which can lead to significant savings over time. It’s important to ensure that the consolidation loan offers a lower interest rate compared to existing debts for it to be effective.

For more info, check out our blog post: The Pros and Cons of Debt Consolidation: Understanding Your Debt Repayment Options

Debt Management Plan

A debt management plan involves working closely with a credit counsellor to devise a repayment strategy with your creditors. This plan consolidates your unsecured debts, such as credit card balances, into one monthly payment. Excluded from this plan are secured debts like mortgages or car loans and government-related debts, including student loans and taxes. The terms often involve repaying the full amount of debt, with the benefit of interest relief and a fixed term, usually up to five years. However, as this is a voluntary agreement, some creditors may not consent to the plan.

Formal Alternatives to a Consumer Proposal

As well as the more flexible options above, there are also formal alternatives to a Consumer Proposal that offer legally binding solutions and structured pathways to address significant debt challenges. In this section, we will explore two formal options: The Orderly Payment of Debts (OPD) Program and Bankruptcy. Each of these approaches is governed by specific legal frameworks and offers a distinct path for those seeking a more formal resolution to their financial struggles.

The OPD Program

The Orderly Payment of Debts (OPD) program, administered in Alberta by Money Mentors, is a formal debt repayment plan under the federal Bankruptcy & Insolvency Act. It involves a court-ordered consolidation of debts with a fixed interest rate of 5%. The OPD program stands out for its comprehensive support from non-profit, unbiased, AFCC Certified Credit Counselors who assist not only in debt repayment but also in fostering better financial literacy for long-term stability.

For more information about OPD, check out our blog post: Is the Orderly Payment of Debts Program Right for You?


Bankruptcy is a legal process designed to provide relief to individuals who cannot meet their debt obligations. In Alberta, bankruptcy can clear most types of debt, but there are also many downsides to filing for bankruptcy. When filing for bankruptcy, a Licensed Insolvency Trustee will oversee the process, selling certain assets to pay off creditors. It’s a step to consider if other debt management strategies are not viable, offering a fresh start but with notable impact on your financial profile.

For more information on bankruptcy, check out our blog post: How to Avoid Bankruptcy: What You Need to Know and Do Before it’s Too Late

Which is the Best Consumer Proposal Alternative?

In conclusion, choosing the best alternative to a Consumer Proposal depends largely on your unique financial situation and goals. We’ve explored a number of options, each with its own set of benefits and drawbacks. Whether you choose an informal alternative like a Debt Management Plan or consolidation loan, or a more formal debt repayment strategy such as the Orderly Payment of Debts program, the right choice varies from person to person.

Remember, the journey to financial freedom is personal and requires a solution tailored to your individual needs. When you’re looking for ways to repay your debt, you will want to consider the benefits of each debt solution and your finances including:

  • Amount of debt
  • Types of debt
  • Monthly payments
  • Impact on credit
  • Long-term financial goals

Money Mentors is here to guide you through this journey. We encourage you to reflect on what you’ve learned, consider your current financial situation, and don’t hesitate to reach out for professional advice. A decision as important as this shouldn’t be made in isolation; it should be an informed and well-considered step towards a brighter, more stable financial future.

Thank you for joining us on this exploration of consumer proposal alternatives. We hope this blog post has illuminated your path and empowered you with the knowledge to make the best decision for your financial wellbeing. Remember, the first step towards a debt-free life is understanding your options, and you’ve already taken that step today.


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Have questions?

Need more information or want to talk to an accredited financial counsellor for peace of mind? Let us help.
Call 1-888-294-0076 or book an appointment. It’s free for all Albertans.

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