Debt Solutions Administered by an OSB Licensed Trustee
Choose Your Path Forward for Debt Relief
Overwhelming credit cards, lines of credit, or CRA tax debt? Explore Canada’s two federally protected debt relief options under the Bankruptcy and Insolvency Act (BIA).
Filing either option through a Licensed Insolvency Trustee (LIT) triggers an immediate Stay of Proceedings—legally halting collection calls, creditor lawsuits, bank account freezes, and CRA wage garnishments instantly.
Option 1: Consumer Proposal
Negotiate with creditors to write off up to 70% of your unsecured debt. Consolidate what remains into one 0% interest payment for up to 5 years.
Option 2: Personal Bankruptcy
A formal legal process designed to eliminate 100% of eligible unsecured debt in as little as 9 months, providing complete financial relief.
Quick-Match Recommendation Engine
Not sure which path fits your budget? Enter 3 quick numbers to see your preliminary match:
Option A: Consumer Proposal
Based on your inputs, a Consumer Proposal is likely your best path. It will allow you to consolidate your debt into one affordable 0% interest monthly payment while keeping 100% of your property and home equity.
Consumer Proposal vs. Bankruptcy: Side-by-Side Comparison
Both options are administered exclusively by federally Licensed Insolvency Trustees (LITs), but they treat your income, assets, and credit profile differently.
| Key Factor | Consumer Proposal | Personal Bankruptcy |
|---|---|---|
| Core Process | Negotiates to repay a reduced percentage of debt (up to 70% forgiven). | Erases all eligible unsecured debt in exchange for surrendering non-exempt equity. |
| Monthly Payment | Fixed 0% interest payment for up to 60 months. Never increases if your income goes up. | Varies based on Surplus Income. Higher earnings increase mandatory monthly payments. |
| Home Equity & Assets | 100% Retained — You keep your house, car, and savings automatically. | Subject to Seizure — Equity exceeding provincial limits must be bought back or surrendered. |
| CRA Tax Debt | Included. Freezes CRA interest and compromises principal tax debt. | Included. Wipes out personal tax liabilities (special rules apply if tax debt exceeds $200k). |
| Credit Rating Impact | R7 Rating for 3 years post-completion (or 6 years from filing). | R9 Rating for 6 to 7 years post-discharge (1st bankruptcy). |
| Length of Process | 1 to 5 Years (Can be paid off early at any time with no penalty). | 9 Months (No surplus income) or 21 Months (With surplus income). |
Explore Our Specialized Debt Calculators
Run your exact numbers using our suite of 100% free, confidential Canadian debt utilities:
Frequently Asked Questions
In a Consumer Proposal, you negotiate to repay a reduced percentage of your debt over up to 5 years while keeping 100% of your assets. In Bankruptcy, non-exempt asset equity and surplus income are surrendered to erase your debts in as little as 9 months.
Yes. Both proceedings trigger an immediate legal Stay of Proceedings under Section 69 of the Bankruptcy and Insolvency Act, forcing the Canada Revenue Agency (CRA) and commercial creditors to halt all wage garnishments, lawsuits, and bank freezes instantly.
A Consumer Proposal places an R7 rating on your credit report for 3 years post-completion (or 6 years from filing). Personal Bankruptcy places an R9 rating for 6 to 7 years post-discharge for a first-time filing.
Find Your Personal Debt Relief Solution
Licensed Insolvency Trustees are here to help. Get a free assessment of your options.