What is a consumer proposal in Ontario?

A consumer proposal is a legal agreement filed with a Licensed Insolvency Trustee to reduce and consolidate your unsecured debt. You repay only a portion—often around 30%—through fixed monthly payments over up to five years.

How much does a consumer proposal cost?

There are no upfront fees. The trustee’s fees are included in your monthly payment, typically around 20–25% of what you pay.

Will a consumer proposal affect my credit score?

Yes, it results in an R7 credit rating, which is less damaging than bankruptcy’s R9. It stays on your credit report for three years after completion.

Can I keep my house and car in a consumer proposal?

Yes, you keep your home, vehicle, and all personal assets in a consumer proposal. This is one of its key advantages over bankruptcy.

Can CRA tax debt be included in a consumer proposal?

Yes, income tax, HST, and other CRA debts can be included. Once accepted, the CRA must stop all collection actions.

Are student loans included in a consumer proposal?

If it has been more than seven years since you were last in school, student loans can be discharged. If it’s been less, they may still be partially included.

Will a consumer proposal stop collection calls?

Yes, once your proposal is filed, all collection calls, lawsuits, and wage garnishments must stop by law.

Do I need to go to court for a consumer proposal?

No court appearance is needed. Your Licensed Insolvency Trustee handles everything directly with your creditors.

Tax Debt Relief

Tax Debt Relief for Ontario Residents

Tax debts are considered unsecured credit and can be included in a bankruptcy or consumer proposal.

Tax Collection and the CRA

Where taxes are owing to the government, the Canada Revenue Agency (CRA) has the authority to:

freeze bank accounts
seize investments like GICs
garnish wages

The CRA can even register a lien against your home for taxes owed.

Unlike other creditors, the CRA many times does not need a court order to seize your property or money.

Tax Debt and Insolvency

Tax debt can be included in a bankruptcy or consumer proposal. Tax debt relief is generally treated the same as any other unsecured creditors, and we can help with this.

Give us a call and we will explain everything, including doing all the paperwork for you.

★★★★★ I owed taxes for my small business and I hadn’t filed my personal taxes in 2 years. Truth is I was scared it would wipe me out. My friend suggested YanchDey to get some advice. I called and they were very helpful and informative. We brought my taxes up to date, I filed a proposal and will be clear and debt free in 2 years. The stress relief was worth everything. Thank you Paul Vorvis, Ajax

Tax Debt in Insolvency

When a bankruptcy or consumer proposal is filed:

tax debts such as income tax, GST/HST, source deductions and director’s liabilities,
- will be discharged upon completion of the process
- meaning you’re released from paying tax debts you owed prior to filing
collection by Canada Revenue Agency such as
- seizing your bank accounts or wages will stop
owing more than $200,000 in personal income tax
- may delay your discharge in a bankruptcy scenario

We’ve helped thousands of individuals get a “new tax life”, or clean slate. We make it so you can focus on new tax filings, rather than trying to pay years’ worth of back taxes.

Who has Tax Debts

A large number of the people we see have tax debt that they have not been able to pay.

Many times this is the only debt that they have. In addition many of these people are under the false impression that taxes will not be wiped out by a bankruptcy or consumer proposal.

In fact income tax debt, HST, and other forms of tax liability can all be included in a bankruptcy or consumer proposal.

★★★★★ After years of struggling with debts, I knew I had to get some help. I just walked into the office one day. They were very open and answered all my questions. It wasn’t always easy but they helped me and my husband and we’re now rebuilding our credit. I know it’s hard but give these people a call, they helped me and I know they will help you. Jo-anne D. Oshawa

You’re Good at What You Do

As with many business people, trades people and tax payers in general they are usually very good at the jobs they do. The bookkeeping and accounting may be an unfamiliar field.

Businesses require filings and accounting and thats where professionals can help.

Sometimes being unaware of when tax returns are due, or how to file with the CRA can cause a person to become behind in their tax responsibilities.

The idea of knowing that you will owe, can even prevent you from attempting to prepare the return!

Whether it be income tax, HST returns, corporate tax returns and financial reports, a bookkeeper or accountant can dramatically assist in ensuring that your taxes are up to date.

Many people are so overwhelmed by their tax burden that they bury their head in the sand. The tax situation becomes worse every year, until finally the taxes owing can be overwhelming.

This is where YanchDey can help with your finances and tax problems.

Eliminating Your Tax Debt

In discussing your finances we will formulate a plan to eliminate all your debt including taxes.

We can look at the reasons that brought you to this situation and help you to avoid them in the future.

In helping with your tax debt forgiveness, we will ensure you’re on the right track with solutions and a plan for your taxes in the future.

Read more about CRA Tax Debt & Bankruptcy >>

Speak to an Insolvency Trustee

Bankruptcy Trustee Kelly Dey — Kelly Dey Insolvency Trustee

Questions about filing for bankruptcy and insolvency? I invite you to call our office to speak to myself or one of our insolvency trustees.

We’re happy to speak over the phone or in-person at one of our offices.

Where you have questions or need some advice, please feel free to give us a call without cost or obligation.

Call us today at 905-721-7506.

Consumer Proposal Ontario | Consumer Proposals

R. Mitchell

6 days ago

★★★★★ Kelly and her staff made the bankruptcy process very easy. It was a relief to my wife and I to have professionals such as these, very supportive. Thanks again

D. Ganguli

2 weeks ago

★★★★★ Some bad financial decisions including being laid off resulted in huge credit cards bills that we were never going to be able to pay off. When we finally got fed up with the collection calls, my husband and I decided to get some help. We decided on bankruptcy giving up many things we didn’t really need, and the counseling was great for us at our age. It wasn’t easy, but we are much happier and debt free. Thanks Again, would recommend.

Jo-anne Lee

1 month ago

★★★★★ I had a student loans of $14,000, and a balance on my credit card, then I received a letter of garnishment. A credit counselor recommended I look into filing for bankruptcy. The bankruptcy trustee was easy to speak with and listened to me. Together we discussed the pros and cons and options available. The bankruptcy will pass, but I’m much happier without the burden of debt in my life. I should have gotten the financial counseling years ago.

Christia McIntyre

4 weeks ago

★★★★★ Professional and friendly, on their advice I did a consumer proposal vs bankruptcy and will be completely out of debt in 2.5 years!! Many thanks

S. Lee

1 month ago

★★★★★ They were completely upfront about what my options were, and gave me a clear cut plan about how I could stop the calls, bill collectors and bills that just kept getting bigger and bigger. Filing for bankruptcy was not an easy decision but the trustee was there for me all the way. Thanks Again!

What happens when you declare bankruptcy in Ontario?

A: When you declare bankruptcy in Ontario, you will be required to surrender any non-exempt assets to a Licensed Insolvency Trustee (LIT) who will sell them to pay off your debts.

Your creditors will be notified and instructed to stop all collection actions against you. You will also be required to attend credit counselling sessions and make regular payments to the LIT.

Once the bankruptcy process is complete, you will be eligible for a discharge from your debts, which means you will no longer be responsible for paying them off.

Who qualifies for bankruptcy in Ontario?

A: To qualify for bankruptcy in Ontario, you must owe at least $1,000 in unsecured debts and be unable to pay them back.

You must reside in Canada or the majority of your assets are held in Canada. Additionally, you cannot have filed for bankruptcy within the past seven years.

How long is bankruptcy process in Ontario?

A: The length of a first-time bankruptcy in Ontario is typically nine months. However, if your income is above a certain threshold, you may be required to make additional payments for a longer period of time.

It is important to note that bankruptcy should be considered as a last resort option. There are alternative debt relief options available, such as consumer proposals, debt consolidation, and credit counselling. It is recommended to seek the advice of a Licensed Insolvency Trustee to determine the best option for your individual financial situation.

How much does it cost to go bankrupt in Ontario?

A: The cost of filing for bankruptcy in Ontario can vary depending on your individual circumstances. However, the fee for filing bankruptcy is typically $1,800.

What do you lose if you declare bankruptcy in Canada?

A: When you declare bankruptcy in Canada, you may be required to surrender any non-exempt assets to a Licensed Insolvency Trustee (LIT), who will sell them to pay off your debts.

This may include your home, car, and other valuable assets. You may also lose your credit cards and be unable to obtain credit for several years. Most personal items you keep, cars under 10,000 dollars, tools of the trade. Give us a call and we can tell you in more detail.

What debts survive bankruptcy?

A: Some debts are not discharged by bankruptcy, including student loans that are less than seven years old, fines, court-ordered restitution, and child support payments.

Can I keep my car if I declare bankruptcy?

A: Whether or not you can keep your car when you declare bankruptcy depends on the value of the car and the amount of equity you have in it.

If the equity in your car is less than the exemption limit, you may be able to keep it.

How much do you pay monthly for bankruptcies?

A: The amount you pay monthly for bankruptcy depends on your income and expenses.

You will be required to make regular payments to a Licensed Insolvency Trustee (LIT) during the bankruptcy process, which will be used to pay your creditors.

Can you buy a house after bankruptcy Ontario?

A: Yes, it is possible to buy a house after bankruptcy in Ontario.

However, it may be more difficult to obtain a mortgage and you may be required to pay a higher interest rate. Many people work on rebuilding their assets and credit rating for a while before considering a home purchase.

What happens 12 months after bankruptcy?

A: After 12 months, you may be eligible for a discharge from your debts, which means you will no longer be responsible for paying them off. You’ll be able to start fresh to rebuild your credit and financial health.

However, certain debts may survive bankruptcy, such as fines or debts resulting from fraud.

What happens 5 years after bankruptcy?

A: After five years, your bankruptcy will be removed from your credit report and you may be eligible for better credit options.

However, bankruptcy can remain on your record for up to seven years, which may affect your ability to obtain credit or employment.

Copyright © 2025 Yanch Dey & Associates
Content within this website about bankruptcy and Consumer Proposals in Ontario is for informational purposes only and should not be construed as financial or legal advice. Yanch Dey & Associates, as licensed insolvency trustees, specialize in providing debt relief and assistance with filing for bankruptcy and Consumer Proposals. For a free consultation, please contact us by email, phone, or visit us in person to explore your options.