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.
In this article, we will explore what government-approved debt relief entails, delve into the limited options currently accessible in Ontario, and discuss alternative pathways to financial freedom.
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
Government-approved debt relief refers to debt assistance programs regulated and authorized by the Canadian and Ontario government. This involves programs that are supervised by the Office of the Superintendent of Bankruptcy (OSB).
Many Canadians in debt prioritize government approved programs to ensure they reduce their debt safely and legally.
However, this is difficult as Ontario has very few government approved debt relief programs currently. Let’s take a look.
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!
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.
