Consumer Insolvency Solutions

Face your financial problems head on

Financial problems can develop gradually or without notice for all kinds of reasons. This can often lead to a dependency on or an overuse of credit in an attempt to get things back on track.

Too often, people let these problems drag on in the belief that things will turn around. While this can happen, in most cases things just get progressively worse until one day you realize the situation is beyond your ability to manage.

Contact the right person

A Licensed Insolvency Trustee is there to help you discover all available options and choose the right solution for you.

Meeting with a Licensed Insolvency Trustee is easy, and taking that crucial first step is important to your overall financial wellbeing.

Once you realize your situation is out of control, consult a Licensed Insolvency Trustee. Most members of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) are licensed as Licensed Insolvency Trustees by the Office of the Superintendent of Bankruptcy and also hold the professional designation Chartered Insolvency and Restructuring Professional (CIRP). They can give you expert advice to address your situation.

It might be awkward to discuss financial problems with family or friends. And the advice they give may not be in your best interests. A Licensed Insolvency Trustee is there to help guide you through the process to finding the right solution.

The initial interview with a Licensed Insolvency Trustee is usually free of charge. And the sooner you deal with the issue, the better. Many people wait too long and as a result have fewer options.

When you are facing financial problems, you should know that there are a number of organizations that claim to offer personal financial solutions who are not licensed to provide you with all of the options you need to protect yourself from creditors.

At your first meeting, the trustee and/or their trusted delegates will analyze your situation, outline the various options and guide you toward making the right solution to resolve your financial problems.

Explore your options

Bankruptcy is not your only recourse- there are more options available to help you regain control:

Reviewing your personal budget and financial priorities

Often, a Licensed Insolvency Trustee can help you avoid bankruptcy.

A simple review of your personal or family budget and a reordering of your financial priorities can be enough to get you back on track. A basic action plan can turn your situation around, enabling you to regain control of your finances.

A Licensed Insolvency Trustee can offer various tools and referrals to other experts, if appropriate, who can help you on this path.

Consolidating all or some of your debts into a single payment

Based on the particular circumstances of your situation, a Licensed Insolvency Trustee can suggest consolidating your debts either through your existing lender or a new financial institution. You can use this procedure to combine all or part of your debts into a single loan, which is often at a lower interest rate. You then make monthly payments over a reasonable time frame and, based on your ability to pay, gain you some room to breathe.

Although this approach eliminates a few worries and gives you some control over your expenses in the short term, you need to take care to avoid becoming entangled again in more needless credit.

Depending on the value of your personal assets, using them as financial leverage (borrowing against your house, for example) might facilitate debt consolidation, with a lower interest rate, and spread your payments over a longer period of time.

Consumer proposal

This is a solution available if you are unable to service debts, the sum of which must not exceed $250,000, excluding debts secured by your principal residence.

The main advantage of an approved consumer proposal, which is the equivalent of an interest-free debt consolidation, is that it allows you to reduce your total debt, establish a manageable monthly payment, and enables you to retain your property and avoid declaring bankruptcy.

In this process, the trustee will work with you to calculate the best offer that can be made to your creditors over a specific period of time, not exceeding five years, giving consideration to your personal circumstances and ability to pay.

Creditors will vote to accept or reject your offer. Once accepted, and the terms of your consumer proposal met, you will be legally released from all eligible debts included in your consumer proposal.

Of all insolvent Canadians in 2014, 44.4% chose to file a consumer proposal in an effort to avoid bankruptcy.


When none of the above options are appropriate for your situation, bankruptcy may be the best solution.

Bankruptcy provides you with protection from most actions by your creditors and can be a quick and generally effective way of becoming debt-free. Because the Bankruptcy and Insolvency Act can be used to eliminate your debts, providing that you turn over to the Trustee your non-exempt personal property (property that can be seized by your creditors). The Act and provincial legislation determine which property can be claimed as exempt. A Licensed Insolvency Trustee will review with you the relevant exemptions for your province.

In fact, most of your personal property might be exempt from seizure, including your personal effects, most of the amounts held in your RRSPs and the cash surrender value of your life insurance policies. Under certain conditions, you can keep your personal motor vehicle and your principal residence. Your desire to keep a home or car will always be factored into the review of the options available for you.

Once you are discharged from bankruptcy, which could be after nine to 36 months depending on your situation, you will be released from the legal obligation to repay all applicable debts that existed on the day you filed for bankruptcy.

For further details on your obligations, the conditions of discharge, the impact on your credit rating or any other matters contact a Licensed Insolvency Trustee.

You can find a Licensed Insolvency Trustee with CIRP certification from CAIRP near you in our searchable database.