What to do next
Speak to a Licensed Insolvency Trustee, not a debt consultant
Only an LIT can file a proposal or bankruptcy. Initial consultations are typically free. Companies charging upfront fees to 'negotiate' are selling you a referral to the same trustee at a markup.
Understand what you keep
Provincial exemptions protect defined assets — commonly RRSPs beyond recent contributions, some home and vehicle equity, tools and household goods. Exemptions vary considerably by province and often determine which option makes sense.
Know which debts are not released
Support arrears, most court fines, and student loans within a statutory period after study generally survive. Secured debt continues if you keep the asset.
Weigh the credit and duration consequences
A proposal usually reports for a shorter period after completion than a bankruptcy, and a second bankruptcy lengthens the process substantially. Model both before choosing.
Frequently asked questions
Will I lose my house?
It depends on equity and provincial exemptions. A consumer proposal is often chosen specifically to retain a home where equity exceeds the exemption.
Does it stop wage garnishment?
Yes. Filing generally stays garnishments, collection calls and most lawsuits immediately — often the most urgent reason people file.
Are student loans included?
Generally not if you were a student within a statutory period before filing. There is a hardship provision available later in limited circumstances.
Should I use a debt settlement company?
No. Only Licensed Insolvency Trustees can file, and LIT consultations are typically free. Fee-charging intermediaries add cost without adding options.
This is general information, not legal advice. Laws vary by location and every situation is different — speak with a qualified lawyer about your specific circumstances.