With overly complex language and a lack of early education, it’s no surprise that so many Canadians are financially illiterate and struggling with debt. Navigating Canada’s debt industry is already difficult for Canadian-born debtors, let alone immigrants living in Canada for the first time. That’s why we’ve created this article specifically for Canadian immigrants who feel lost in Canada’s debt industry. We’ll be sharing the various options for debt relief in Canada and whether Canadian immigrants are eligible.
Popular Debt Relief Options in Canada
- Debt Consolidation: Debt consolidation combines multiple debts into a single loan with a lower interest rate or more manageable monthly payments, making it easier to keep track of payments and reduce overall debt.
- Consumer Proposal: A consumer proposal is a formal agreement with creditors, facilitated by a licensed insolvency trustee, to pay back a portion of the debt over a specified period. Creditors will usually forgive the remaining balance.
- Bankruptcy: Bankruptcy is a legal process that allows individuals to discharge most of their unsecured debts, giving them a fresh start financially, but it can have significant long-term effects on your credit.
- Credit Counselling: Credit counselling involves working with a trained professional to assess your financial situation, develop a personalized plan for managing debt, and provide education on budgeting and money management.
- Informal Debt Settlement: Involves negotiating directly with creditors to reduce the total amount owed or arrange for more favorable payment terms, without going through formal bankruptcy processes. However, an informal settlement is not legally-binding.
Can I File for Bankruptcy as an Immigrant in Canada?
Permanent residents, temporary residents, and individuals without legal status can file for bankruptcy in Canada, as long as you’re considered insolvent. To be considered insolvent, you must owe more than the value of your assets.
If you’re undocumented, special considerations come with your bankruptcy filing. Talk to one of our debt advocates for more information.
Can I Do a Consumer Proposal as an Immigrant in Canada?
Yes, immigrants in Canada are eligible for a consumer proposal, including permanent residents, temporary residents, and individuals without legal status.
Can I do Debt Consolidation as an Immigrant in Canada?
Yes. Permanent residents, temporary residents, and individuals without legal status can get a loan for debt consolidation in Canada. The only potential barriers to a debt consolidation loan would be your credit score. If you have a low credit score, you may not be able to get a consolidation loan without reasonable enough terms to be worth it.
Questions Immigrants Ask About Debt in Canada: Answered
At 4 Pillars, we’ve helped thousands of Canadians get on the path to a debt-free life. We’ve worked with many immigrants in Canada to resolve their debts and enhance their understanding of their finances, debt, and credit. As such, we’ve gotten a lot of questions about things like debt relief, credit rebuilding, and much more. Today, we’ll be answering some of the most common questions about debt we get from Canadian immigrants.
Does credit score affect PR applications in Canada?
No, credit scores are not a part of your application criteria to become a permanent resident of Canada. Your credit score in your home country won’t carry over to Canada, no matter what your credit score is.
Can you immigrate to Canada if you have debt?
Yes, you can immigrate to Canada even if you have debt, have filed for bankruptcy, or pursued other legal avenues for debt repayment in your home country. While the debt itself won’t impact your immigration, it may affect your ability to show proof of funds. You’re required to show you have a minimum amount of accessible funds to support yourself and your family upon arrival to Canada. As of 2025, the minimum required amount for one person is $15,263 CAD.
Can you be deported if you have a debt?
No. Canada will never deport you because you owe money. However, you will likely face some of the common consequences of high debts, such as collection calls and wage garnishment. Starting a consumer proposal or filing for bankruptcy will stop collection calls and wage garnishment from continuing.
