A consumer proposal after divorce or separation is often the best way to manage debt when two households are suddenly living on the same income that once supported one.

Many people face credit card balances, joint loans, or bills left behind after the breakup, and a proposal can reduce what you owe and make repayment realistic.

This creates stability during a stressful time and gives you a plan to rebuild financially on your own.

When a relationship ends, the financial impact can be as stressful as the emotional one. Many people discover that debts they managed together are overwhelming when paid alone.

Debt becomes hard to manage after a separation when:

• Household income drops suddenly, but the debts remain the same.
• One partner stops contributing to joint loans or shared credit cards.
• Legal costs, moving expenses, and new housing increase monthly pressure.
• Joint accounts remain active, causing confusion about who should pay what.
• Old arguments about money resurface, making communication difficult.

A consumer proposal helps by replacing uncertainty with a clear, legal plan that fits your new budget.

How a Consumer Proposal Reduces Post-Separation Debt

A proposal lets you settle unsecured debts for less than you owe and spread repayment over up to five years. This can make a major difference when you are adjusting to life after separation.

A proposal helps by:

• Cutting the total amount you owe, often to around 30% of the balance.
• Eliminating all interest, preventing balances from growing while you get back on your feet.
• Stopping collection activity from joint credit cards and unsecured loans.
• Combining all qualifying debts into one simple monthly payment.
• Giving you predictable payments so budgeting becomes easier.

This creates a manageable path forward and helps you rebuild independently.

What Happens to Joint Debt After Divorce or Separation

Many people are surprised to learn that banks do not honour separation agreements. Even if your ex-partner promises to pay a joint debt, the creditor will still hold both of you responsible.

A consumer proposal helps with joint debt because:

• Your portion of the debt is settled inside the proposal.
• Creditors cannot pursue you for the remaining joint balance.
• Your ex-partner becomes responsible for their portion only.
• Collectors must stop contacting you, even if the other person does not pay.
• You gain legal protection that does not depend on your ex’s choices.

This allows you to move forward without being tied to the other person’s financial behavior.

How a Proposal Helps With Debts Created During the Breakup

The end of a relationship often leads to new debt—moving costs, legal bills, and setting up a new home.

A proposal can include these types of debt when:

• The costs were placed on credit cards or lines of credit.
• You borrowed to furnish a new home or pay legal fees.
• You used credit to make ends meet during the transition.
• Temporary living expenses forced you to use credit more than usual.
• Your ex stopped contributing and you were left covering everything.

A proposal helps you clean up these debts and regain stability more quickly.

When a Proposal Is Better Than Trying to Split Debt

Many separating couples try to divide debt based on fairness, but creditors do not follow those agreements.

A proposal is usually the better choice when:

• You cannot rely on your ex to pay their share of joint debt.
• You want legal protection that does not depend on the other person.
• Your income changed and payments are no longer affordable.
• Stress from debt is affecting your wellbeing during the breakup.
• Negotiating with your ex is impossible or causing conflict.

A proposal lets you separate your finances cleanly and focus on rebuilding your life.

This consumer proposal calculator shows an approximate of how much you could save.

Consumer Proposal Ontario | Consumer Proposals