Last updated: October 2026
In 2026 alone, over 70,000 consumer proposals were filed across Canada — a record high — reflecting how many households are turning to government-approved solutions to resolve their debt.
If you’re struggling with unmanageable debt, you may have heard that there are government-approved debt relief options in Ontario — and there are. Under Canada’s federal Bankruptcy and Insolvency Act (BIA), two regulated programs exist to help everyday Ontarians legally resolve their debt: the consumer proposal and personal bankruptcy. This article explains how both work, who qualifies, and how to choose the right path.
What government approved debt relief programs are there in Ontario and how can they help you pay off your debts? The short answer is…there’s very few. But what is there can be really effective for reducing your debts and making repayment possible. Nevertheless, they don’t come without drawbacks.
At 4 Pillars, we help guide individuals living in Ontario through their debt relief options, including government approved ones. We’ll share some insights into the various avenues available and how they can help you relieve your debts and jumpstart your finances.
What Is Government-Approved Debt Relief in Ontario?
Government-approved debt relief in Ontario refers to two legally regulated programs under Canada’s Bankruptcy and Insolvency Act: the consumer proposal and personal bankruptcy. Both are overseen by the federal Office of the Superintendent of Bankruptcy and can only be filed through a Licensed Insolvency Trustee (LIT).
Is there a Government Approved Debt Relief Program in Ontario?
The only government approved debt relief options in Ontario are:
- Bankruptcy, which eliminates the entirety or majority of what you owe with you only needing to make monthly payments based on your income. However, the individual must surrender viable assets and follow strict rules, including reporting any changes in income. It will leave the lowest possible credit rating on your credit report, an R9 rating.
- Consumer proposals, which can reduce your unsecured debts by up to 80%. The debt reduction is subject to creditor approval. You will need to pay the remainder via monthly payments. Unlike bankruptcy, it doesn’t involve any surrendering of assets, and your monthly payments won’t increase if your income changes. It will leave a R7 rating on your credit report.
Both bankruptcies and consumer proposals are regulated by the Office of the Superintendent of Bankruptcy, and will provide you legal protections against collections agencies and wage garnishment.
We can talk at length about the pros and cons of a bankruptcy or consumer proposal — it’s not as straightforward as you’d think! But we prefer to speak 1-on-1 as it allows us to give better insights into how each option will affect you specifically.
Schedule a free consultation today!
Are there Government Grants Available to Pay off Debt in Canada?
As of 2025, no government grants have been made available for debt repayment purposes in Canada. The closest we have to it currently is student loan repayment assistance plans, which are only available to individuals who can’t pay their monthly student loan payment.
Options Other Than Bankruptcy and Consumer Proposals
While bankruptcy and consumer proposals are the only government approved forms of debt relief, they’re not your only option for paying off your debts. While not regulated by the government, these options are great for people with lower debts or those looking to avoid the consequences of bankruptcy and consumer proposals.
Debt Consolidation Loans
Debt consolidation loans are new loans you take out (often from a bank or credit union) to pay off multiple high-interest debts. Once each debt account is paid off, you will be left with only one monthly payment. Getting a consolidation loan at a lower interest rate than your original loans makes paying off the debt easier.
Have any questions? Ask us about Debt Consolidation Loans!
Debt Management Plans
Debt management plans require you to work with a non-profit credit counsellor. This credit counsellor will help you to create a debt management plan which consolidates your debts into one monthly payment (even across different creditors). They will also work with your creditors to lower or eliminate interest rates, but you will need to pay 100% of the debt.
For transparency, please note that most non-profit credit counselling societies are primarily funded by your creditors. This does require them to work in your creditor’s best interest, as well as your own.
Have any questions? Ask us about Debt Management Plans!
How Government-Approved Debt Relief Works in Ontario: Step by Step
- Free Consultation: Meet with a 4 Pillars debt consultant — at no cost and no obligation — to review your full financial picture.
- Review Your Options: Your consultant explains all government-approved and private debt relief options available to you in Ontario, with no creditor bias.
- Choose Your Path: Together you select the right solution — consumer proposal, debt restructuring, or another strategy — based on your income, assets, and goals.
- File and Get Protected: Once filed through a Licensed Insolvency Trustee, a legal stay of proceedings immediately stops collection calls, wage garnishments, and interest charges.
- Rebuild Your Credit: 4 Pillars supports you through the credit rebuilding process after your debt is resolved, helping you achieve long-term financial wellness.
Why Ontarians Trust 4 Pillars for Debt Relief Guidance
“My consultant explained every option clearly and never pressured me. The consumer proposal saved my home.”
“Starting the consumer proposal process was not an easy decision for me. Dealing with debt can be extremely stressful, overwhelming, and honestly embarrassing at times… From our very first conversation, Abdul was professional, patient, knowledgeable, and incredibly understanding. He never made me feel judged or uncomfortable about my financial situation.”
“My agent, Mr. Abdul Kavi, was very knowledgeable, patient, and always took the time to explain every step clearly, making what initially felt like an overwhelming situation much easier to navigate. Mr. Kavi made me feel heard and never pressured me into making a decision.”
“Following a medical injury that left me unable to work, I found myself overwhelmed by credit card and bank debt… From our very first conversation, Kristen was incredibly patient, kind, and understanding… Thanks to Kristen’s professionalism, knowledge, and caring approach, I was able to move forward with confidence and regain a sense of control over my finances.”
“Abdul provided exceptional support throughout my application process. He explained every step clearly, made sure I understood my options, and guided me through the paperwork with patience and professionalism. His knowledge and calm approach made a stressful situation much easier to manage.”
Get Your Free, No-Obligation Debt Relief Consultation“Kristen made this process an absolute breeze! I am so thankful to get my life back, and I couldn’t have done it without her.”
Why Choose 4 Pillars?
Unlike most debt professionals, 4 Pillars is a consumer-first debt advocacy group. We don’t work with your creditors in any way. In fact, we’ll probably never even speak to them. Instead, our priority is to help you understand how the debt industry works, what your debtor rights are, and options you have to start paying off your debt.
In summary, we present you only with the information you need to understand debt repayment and relief options. You have the autonomy to choose what path to take, and once you decide, we’ll help you start the process with continuous support from our team throughout your debt repayment.
When you’re ready, let’s have a conversation about your debts and where you want to be in 10 years time. We’re here to give you unlimited information, knowledge, and support.
Frequently Asked Questions
Is there really a government-approved debt relief program in Ontario?
Yes. The Bankruptcy and Insolvency Act (BIA) is federal legislation that governs two government-approved debt relief options available to Ontarians: the consumer proposal and personal bankruptcy. Both are administered by a Licensed Insolvency Trustee.
Is it a good idea to use a debt relief program?
For many Canadians it is. A government-approved program like a consumer proposal legally stops collection calls, freezes interest, and lets you repay a portion of what you owe. A licensed debt consultant can help you decide if it’s right for your situation.
How can I get rid of $30,000 in credit card debt in Ontario?
A consumer proposal lets you legally settle unsecured debts like credit cards for less than the full amount owed — often 20–50 cents on the dollar — with no added interest and up to 5 years to pay.
Can I clear my debt without paying the full amount?
Yes, through a consumer proposal filed under the federal Bankruptcy and Insolvency Act. Creditors vote to accept a reduced lump-sum or monthly payment plan, and the remainder of eligible unsecured debt is legally discharged.
