My Debts Are High And I’ve Been Told I Cant File A Proposal Is That True

Debunking the Myth: Can High Debts Prevent You From Filing a Proposal?

The question of whether a high debt level can bar you from filing a proposal is a common concern for many debtors. This article aims to debunk the myth and provide clarity on the issue, while shedding light on the two types of proposals available for different debt levels.

Understanding the Types of Proposals

Consumer Proposal: This proposal is an option for a debtor with a debt level of $75,000 or less. It’s important to note that a mortgage on a principal residence is not included in this figure.

Division I Proposal: This proposal is an option for a debtor whose debts exceed $75,000.

The concepts governing both types of proposals are mostly similar, with only a few differences.

Consumer Proposal

A Consumer Proposal is a legal agreement set up by a licensed insolvency trustee. The debtor agrees to pay a portion of their debts back over a period of up to five years. The rest of the debts are then forgiven.

Who Can File a Consumer Proposal?

Any debtor who has unsecured debts of less than $250,000, excluding the mortgage on a principal residence, can file a consumer proposal.

Division I Proposal

Division I Proposals, on the other hand, are available to both businesses and individuals. There’s no limit to the amount of debt, making it a suitable option for debtors with high debt levels.

Who Can File a Division I Proposal?

Any debtor, whether an individual or a business, whose unsecured debts exceed $250,000 can file a Division I proposal.

Debunking the Myth

So, is it true that high debts prevent you from filing a proposal? The answer is a resounding NO. Regardless of your debt level, there is a proposal suitable for you. Whether your debts are less than $250,000 or exceed this figure, you can file a proposal to manage your debts effectively.

Considerations Before Filing a Proposal

Before filing a proposal, it’s critical to consider the following:


  • Your total debt level;
  • Your ability to make monthly payments;
  • The type of debts you have.


Seeking Professional Help

The process of filing a proposal can be complex. It’s advisable to consult a licensed insolvency trustee to guide you through the process and help you make an informed decision.


In conclusion, the level of debt does not prevent anyone from filing a proposal. Two types of proposals cater to different debt levels. Understanding these options is crucial in managing and overcoming financial difficulties.

Remember, high debts do not equate to the end of the road. There’s always an option to regain financial control and start a new chapter.

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