Population: 14.2M
Debt Relief in Ontario
If you're struggling with debt in Ontario, you have legal options. Consumer proposals and bankruptcy are governed by federal law, but each province has different exemption amounts, garnishment limits, and limitation periods that affect your debt relief journey.
Consumer Proposals in Ontario
In Ontario, consumer proposals are administered by Licensed Insolvency Trustees (LITs) licensed by the federal government. Ontario residents can file a consumer proposal if their total debts are under $250,000 (excluding mortgage on primary residence). The filing fee is included in the proposal payments.
Bankruptcy in Ontario
Ontario bankruptcy exemptions allow you to keep: household furniture up to $13,150, one vehicle up to $6,600, tools of trade up to $11,300, and personal items. RRSPs/RRIFs (except contributions in the last 12 months) are exempt. The surtax income threshold for surplus income is higher in Ontario.
Wage Garnishment in Ontario
In Ontario, creditors can garnish up to 20% of your wages for most debts. The CRA does not need a court order to garnish wages. Consumer proposals and bankruptcy immediately stop wage garnishment through a stay of proceedings.
Limitation Periods in Ontario
Ontario's Limitations Act sets a 2-year basic limitation period for most debt claims. After 2 years of no acknowledgment or payment, a debt is generally uncollectible through court action (though it may still appear on your credit report).
Key Takeaways for Ontario Residents
- Consumer proposals and bankruptcy are available across Ontario through federally Licensed Insolvency Trustees.
- Filing either option immediately stops wage garnishment, collection calls, and creditor harassment.
- Ontario has specific bankruptcy exemption amounts that determine what assets you can keep.
- The CRA can garnish wages without a court order, but a consumer proposal or bankruptcy stops CRA garnishment.
- Consultations with Licensed Insolvency Trustees are free and confidential.
Ontario Debt Relief FAQ
How do I file a consumer proposal in Ontario?
In Ontario, consumer proposals are filed through a Licensed Insolvency Trustee (LIT) licensed by the federal government. The LIT will assess your financial situation, prepare the proposal, and submit it to your creditors. The process is the same across Canada but exemption amounts and surplus income thresholds may vary by province. Contact a LIT for a free consultation.
What assets can I keep if I file bankruptcy in Ontario?
Ontario bankruptcy exemptions allow you to keep: household furniture up to $13,150, one vehicle up to $6,600, tools of trade up to $11,300, and personal items. RRSPs/RRIFs (except contributions in the last 12 months) are exempt. The surtax income threshold for surplus income is higher in Ontario.
Can creditors garnish my wages in Ontario?
In Ontario, creditors can garnish up to 20% of your wages for most debts. The CRA does not need a court order to garnish wages. Consumer proposals and bankruptcy immediately stop wage garnishment through a stay of proceedings.
What is the limitation period for debt in Ontario?
Ontario's Limitations Act sets a 2-year basic limitation period for most debt claims. After 2 years of no acknowledgment or payment, a debt is generally uncollectible through court action (though it may still appear on your credit report).