How long does a bankruptcy last?

The length of the bankruptcy depends on a few factors – whether you have ‘surplus income’ (see below) and whether you have been bankrupt before. If you have no surplus income and have never been bankrupt before, you will be eligible for an automatic discharge after nine months.

How long does the Consumer Proposal last?

A Consumer Proposal must be completed within 5 years. Usually the payments are monthly (over 60 months), but a Consumer Proposal can also include a lump sum payment, or a combination of the two. If your finances allow, you can pay it off sooner than the agreed-upon payment schedule lays out.

What is a bankruptcy?

A bankruptcy is a legal process to discharge your debts. It is a declaration that your debts are too high for you to repay – and far better than the old concept of a ‘debtor’s prison’! It allows for a fresh start, while giving your creditors some return on what’s owed only if you have a level of income that allows for payments to be made to them, or unprotected assets that can be liquidated (however, most common assets are protected during this process – see below for more information on protected personal assets).

What is a Licensed Insolvency Trustee (LIT)?

Licensed Insolvency Trustees (LITs) are federally regulated professionals who provide advice and services to individuals and businesses to reorganize and resolve financial difficulties with expertise and compassion. LITs help individuals or businesses make informed choices to deal with their financial difficulties. They are the only professionals able to administer bankruptcies or proposals.

Debt Relief Quiz: Find Your Best Option

Q: What is a Consumer Proposal?

A Consumer Proposal is an offer to your creditors to pay back a percentage of what you owe them, based on your ability to pay. It is governed by the Bankruptcy and Insolvency Act, administered by a Licensed Insolvency Trustee. Unlike other negotiated debt settlement plans, it is legally binding on all creditors and usually involves paying back less than the total amount of your debt.

If you are losing sleep over debt, you are not alone. Many people quietly struggle with rising balances, collection calls, and the feeling that their options are running out.

What most Canadians do not realize is that there are several ways to deal with serious debt, and bankruptcy is only one of them. The challenge is figuring out which solution actually fits your situation. That is exactly what this guide and quiz are designed to help you do.

*The information within this quiz is for informational purposes only for personalized support please book a free consultation with one of our Licensed Insolvency Trustee Partners.

Common Signs Your Debt May Need Professional Help

Many people wait until debt feels overwhelming before asking for help. However, there are early warning signs that your financial situation may benefit from professional advice.

Some common indicators include:

relying on credit cards or loans to cover everyday expenses
falling behind on monthly payments
receiving frequent collection calls or notices
juggling several high-interest debts that are difficult to manage

If these situations sound familiar and you want to find an immediate solution, a Licensed Insolvency Trustee can help you understand your options before the problem gets further.

The Role of a Licensed Insolvency Trustee

A Licensed Insolvency Trustee (LIT) is a federally regulated professional who helps individuals and businesses deal with serious debt problems. In Canada, trustees are the only professionals legally authorized to administer consumer proposals and bankruptcies.

Their role is to review your financial situation, explain the options available to you, and guide you through the process if a formal solution is needed. Because they are regulated by the Federal Government, they must follow strict standards designed to ensure fair and impartial advice.

If you are ready,you can talk with a Licensed Insolvency Trustee (LIT) at CSVan and have the opportunity to ask questions and understand your options before deciding on the next step.

What Is a Consumer Proposal and How Does It Work?

A consumer proposal is a formal debt solution available under the Bankruptcy and Insolvency Act that allows you to settle unsecured debts by offering to repay a portion of what you owe over time. Instead of dealing with multiple creditors, you make one structured monthly payment based on what you can reasonably afford.

Learn more about how a consumer proposal works.

This process is administered by a Licensed Insolvency Trustee, who works with you to prepare the proposal and present it to your creditors. If the majority of creditors accept the proposal, it becomes legally binding. Most consumer proposals last up to five years, although they can be paid off sooner if your situation allows.

Who Qualifies for a Consumer Proposal in Canada

A consumer proposal may be an option if you:

owe less than $250,000 in total debt, not including the mortgage on your principal residence
have a stable source of income to make monthly payments
are unable to repay your debts in full as they become due

Consumer Proposal vs Other Debt Solutions

If you are dealing with significant debt, several solutions may be available depending on your financial situation. A consumer proposal is one option, but it is helpful to understand how it compares to other approaches such as debt consolidation or bankruptcy.

Consumer Proposal vs Debt Consolidation

Debt consolidation combines several debts into one loan with a single monthly payment. While this may simplify repayment, it does not reduce the total amount owed. A consumer proposal may reduce the amount of unsecured debt you repay, with payments structured around what you can afford.

Consumer Proposal vs Bankruptcy

Both a consumer proposal and bankruptcy are formal debt solutions administered by a Licensed Insolvency Trustee, but they work differently.

With a consumer proposal, you typically keep your assets and repay a portion of your debt through fixed monthly payments. Bankruptcy may involve surrendering certain assets and payments that depend on your income.

If you would like to learn more about how these processes work, you can read our detailed guide on consumer proposals, and personal bankruptcy.

Because every financial situation is different, taking a quick step back to review your income, expenses, and debt can help clarify which options may be worth considering.

How a Debt Assessment Quiz Can Help Identify Your Best Option

This assessment offers a quick overview of your financial situation and can point toward debt solutions that may be worth exploring. While it does not replace professional advice, it can help you better understand where you stand.

The quiz considers several key factors, including the stability of your income, whether your income covers your expenses, how you are currently managing debt payments, and whether you own assets such as a home or investments.

All responses are anonymous and data is not saved. For personalized support reach out to one of our Licensed Insolvency Trustee Partners for a free consultation.

Take the Debt Management Quiz

Answer the following questions to see which debt solution might fit your situation. It takes only a few minutes to complete.

How a Licensed Insolvency Trustee Helps You Find the Right Solution

Understanding your options is often the first step toward regaining control of your finances. Whether your quiz results suggest budgeting changes, a consumer proposal, or another solution, speaking with a professional can help you move forward with confidence.

The team at Campbell Saunders has been helping individuals and businesses navigate financial challenges for more than 40 years. A Licensed Insolvency Trustee can review your situation, answer your questions, and explain which options may work best for you.

If you are ready to take the next step, contact Campbell Saunders to schedule a free and confidential consultation and start working toward a more stable financial future.