What Happens If I Can’t Pay My Sponsorship Debt?

Navigating Sponsorship Debt: A Comprehensive Guide

When you sponsor a relative for immigration to Canada, you are signing a legal agreement with the Canadian government. This agreement, known as a sponsorship undertaking, carries specific financial responsibilities. But what happens if one can’t meet these obligations? This article will shed light on the critical question: What Happens If I Can’t Pay My Sponsorship Debt?

Understanding Sponsorship Debt

Sponsorship debt is an obligation that arises when the person you sponsored (the sponsee) receives social assistance from the Canadian government during the sponsorship period. This period can range from 3 to 10 years, depending on the family relationship and the sponsee’s age.

The sponsor is then required to reimburse the government for the social assistance given to the sponsee. This reimbursement, plus any applicable interest and legal fees, is known as the sponsorship debt.

Consequences of Sponsorship Debt Default in British Columbia

In British Columbia, if the sponsee receives social assistance, the sponsor is referred to the Sponsorship Default Recovery Program. The sponsor is then pursued for repayment of the debt, which includes the total social assistance paid, plus any associated legal costs.

The sponsor will receive numerous reminders about the debt, and the debt will continue to grow as long as the sponsee continues to receive social assistance. Additionally, interest and legal fees will continue to accumulate. Therefore, the sooner action is taken to eliminate the debt, the better.

Special Circumstances for Sponsorship Debt Forgiveness

There are instances where the government may forgive the sponsorship debt. These scenarios are typically extraordinary circumstances beyond the sponsor’s control. Some of these situations include:

  1. The sponsor and the sponsee separated due to an abusive relationship.
  2. The sponsor became unable to work due to illness.
  3. The sponsor is on Guaranteed Income Supplement.
  4. Other exceptional circumstances.

In these cases, the sponsor should maintain open communication with the provincial government, informing them of any situations that make it impossible for them to continue supporting the sponsee.

Options to Settle Sponsorship Debt

Fortunately, there are several ways to manage and eventually eliminate your sponsorship debt.

Engage the Government of B.C.

Firstly, reach out to the provincial government and explain why you were unable to continue supporting your sponsee. The government may view your circumstances as extraordinary and offer some relief.

If you foresee a change in your circumstances that would allow you to pay off the debt, you can request the government to suspend your payments temporarily. For instance, if you are currently unemployed but have received a job offer, this could be a valid reason for a payment suspension.

You can also send a detailed letter to the government outlining your income, expenses, and cash flow. This information can be used as a basis for negotiating a manageable payment plan. It’s always beneficial to propose a solution in your communications with the government, rather than simply stating that you cannot pay.

File for Bankruptcy or Consumer Proposal

Under the Bankruptcy and Insolvency Act, filing for bankruptcy or a consumer proposal can help you eliminate unsecured debts, including sponsorship debt. When you file for insolvency, all legal actions by creditors, including the government, are halted.

If you file for bankruptcy, all your assets are assigned to a Licensed Insolvency Trustee (LIT), who will sell them and distribute the proceeds to your creditors. A portion of your income will also be directed towards the sponsorship debt. Once the bankruptcy process is complete, your sponsorship debt is fully eliminated, allowing you to start rebuilding your credit.

If you want to avoid bankruptcy, a consumer proposal might be a suitable alternative. This agreement allows you to offer the government a reduced amount to settle your sponsorship debt. The agreed sum is then paid off, interest-free, over a period of up to five years.


Sponsorship debt can be a significant financial burden, but there are strategies available to manage and eliminate this debt. Your first step should always be to reach out to the relevant government department to discuss your situation.

However, if these options prove unfruitful, consider reaching out to a Licensed Insolvency Trustee. They can provide comprehensive advice on your legal debt relief options. It’s crucial to address your financial difficulties head-on, rather than hoping they’ll disappear. Remember, there’s no statute of limitations on government debt, and ignoring it will only exacerbate the situation.

Discuss your options to eliminate your sponsorship debt with a Licensed Trustee.

Key Takeaways

  • Sponsorship debt arises when the person you sponsored for immigration receives social assistance from the Canadian government.
  • If the sponsee gets social assistance, the sponsor is pursued for repayment, leading to sponsorship debt.
  • In special circumstances, sponsorship debt may be forgiven.
  • There are several options to manage and eventually eliminate your sponsorship debt, including engaging the Government of B.C. or filing for bankruptcy or a consumer proposal.

Remember, What Happens If I Can’t Pay My Sponsorship Debt? should never be a question left unanswered. Always seek professional advice when faced with such situations to ensure you’re making the best financial decisions.

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