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Frequently asked questions about bankruptcy & debt

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FAQs

What are some warning signs that I might have a debt problem?

If your monthly debt payments (not counting rent or a mortgage) are greater than 20% of your income, you are headed toward a difficult financial situation. Other warning signs include difficulty paying monthly bills, trouble keeping track of money, and uncontrolled spending.

What is the difference between personal bankruptcy and a consumer proposal?

A consumer proposal lets you repay part of your unsecured debt over up to five years, and you usually keep your assets. Bankruptcy releases most unsecured debts, but non-exempt assets may be sold and it has a bigger impact on your credit. Both are legal processes under the Bankruptcy and Insolvency Act, administered by a Licensed Insolvency Trustee.

A consumer proposal is available if your total debts, not counting the mortgage on your principal residence, are $250,000 or less ($500,000 for a joint proposal). Above that, a Division I proposal may be an alternative to bankruptcy. A Licensed Insolvency Trustee will review which option fits your income, assets and goals.

Am I eligible to file a consumer proposal?

To be eligible to file a consumer proposal, your debts must total less than $250,000. You must have a stable income source, have no open prior proposal proceedings, and be unable to pay your debts when they are due. Businesses cannot file consumer proposals.

What are the steps to filing a consumer proposal?

First, you need a Licensed Insolvency Trustee to review your financial situation. Your trustee will work with you to determine how large a monthly payment you can fit into your budget. Then, he or she will make an official offer to your creditors. If it is accepted, you make monthly payments for a predetermined amount of time.

How do I rebuild my credit after bankruptcy or filing a consumer proposal?

The best thing you can do to rebuild your credit is to pay your bills on time. Avoid any habits that could get you back into debt, like charging purchases you can’t pay back. When you set up your budget, make sure to put aside extra money each month in case of emergency. You can also get a secured credit card with a low limit, which, if you make your payments on time, can start to rebuild your credit score.

Browse debt options in Canada

Consumer Proposals

Consumer proposals can be an alternative to bankruptcy that reduces debt and gives you more time to pay back creditors.

Legally stop most collection action
Usually keep your assets
Avoid bankruptcy

Bankruptcy

A last resort when other options won’t work. Some debts, such as support payments and court fines, aren’t released.

Wipe out most unsecured debt
Keep assets protected by provincial law
Support from your trustee throughout

Debt Consolidation

A loan from a bank or lender that combines several debts into one payment.

One payment instead of several
May lower your interest rate
Doesn’t reduce what you owe

Not available through Harris & Partners.

Debt Management Plan

A non-profit credit counsellor arranges one monthly payment to your creditors, usually over up to 5 years.

You repay the full amount owed
Interest may be reduced
Creditors don’t have to agree

Not available through Harris & Partners.

Credit Counselling

Non-profit credit counsellors help you understand your finances and build a budget.

Work out what you owe
Plan a budget
Learn money management skills

Not available through Harris & Partners.

Debt Settlement

Private companies negotiate a lump-sum payment with your creditors, who don’t have to agree. They aren’t Licensed Insolvency Trustees

Not regulated under the BIA
No legal protection from creditors
Fees often charged upfront

Not available through Harris & Partners.

Corporate Bankruptcy

An orderly way to close a company that can’t be rescued. Directors may still be personally liable for some debts.

Orderly wind-down of the company
Assets sold by the trustee
Ends creditor claims against the company

Division I Proposals

For businesses, and for individuals whose debts (excluding their mortgage) are over $250,000. Change the terms of your debt by reducing what you owe, extending the repayment period, or both.

Repay part of your debt over time
Keep your business or assets
Avoid bankruptcy

Corporate Insolvency

Options for a business that can’t pay its debts, from restructuring to an orderly wind-down.

Restructure through a Division I proposal
Protect jobs where viable
We’ll assess every option

Support across Canada

Why choose us for consumer proposals in Ontario?

Remove up to 80% of your debt

Our Licensed Insolvency Trustees can provide a customised consumer proposal that could shrink your debt by up to 80%.

Get debt help

Professional guidance in any language

Our multilingual team offers debt support in Farsi, Portuguese, Italian, Tamil, and more, so you can feel comfortable every step of the way.

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Nationwide support

With offices in nine provinces, we offer in-person debt support across Canada—from Atlantic provinces to Ontario to British Columbia.

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Get in touch with Harris & Partners

Our Licensed Insolvency Trustees offer free, confidential consultations from offices across Canada. Find your nearest office or call 800-268-8093 to book.

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Phone number: 800-268-8093
Email: hello@harrispartners.ca

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Frequently asked questions about bankruptcy & debt

FAQs

What are some warning signs that I might have a debt problem?

What is the difference between personal bankruptcy and a consumer proposal?

Am I eligible to file a consumer proposal?

What are the steps to filing a consumer proposal?

How do I rebuild my credit after bankruptcy or filing a consumer proposal?

Can I include my student loans in my bankruptcy?

What will happen to my house if I file for bankruptcy?

What is the difference between a licensed trustee and a credit counsellor?

Is my spouse liable for my debt?

What are the best ways to reduce debt?

Browse debt options in Canada

Why choose us for consumer proposals in Ontario?

Get in touch with Harris & Partners

Contact form

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