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The federal [http://canlii.ca/t/7vcz ''Bankruptcy and Insolvency Act''], in Part III, contains the provisions under which a debtor can make a '''proposal''' to all or a class of creditors (for example, only unsecured creditors) to pay off a percentage of their debts, after which the debtor will be discharged at law from owing the balance of the debts to those creditors.
The proposal provisions are not the same as an [[Assignments in Bankruptcy|assignment in bankruptcy]]. Proposals are designed to provide an alternative to bankruptcy for those debtors who have some ability to pay on their debts. In a bankruptcy, the debtor gives up what they own to eliminate their debts. A proposal is aimed at the debtor who has some ability to pay on their debts, but who cannot pay off all their debts over a reasonable time because of the overall amount due relative to the monthly income available to make payments.
The ''Bankruptcy and Insolvency Act'' provides for two types of proposals: consumer proposals and ordinary proposals.