A consumer proposal is a legal debt relief solution in Canada, governed and regulated by the Bankruptcy and Insolvency Act. A consumer proposal will impact your credit report — but the proposal itself, as well as its credit impact, won’t lead to immigration issues. Canadian immigration authorities do not consider your credit score or past debt restructuring when reviewing your permanent residency application.
Will a Consumer Proposal Affect My PR Application in Canada?
No, filing a consumer proposal will in no way affect your eligibility to become a permanent resident of Canada. It also won’t affect your ability to sponsor someone else to come to Canada.
Will a Bankruptcy Affect My PR Application in Canada?
No, bankruptcy won’t affect your eligibility to become a permanent resident of Canada. However, being bankrupt will prevent you from sponsoring someone else to live in Canada, including family members. This is because the government takes your bankruptcy as a sign you cannot financially support bringing someone to Canada. You will not be able to sponsor someone to come to Canada until you’re discharged, which can take 9-months for a first-time bankruptcy.
If you are interested in sponsoring someone for Canadian immigration or permanent residency, we recommend using other debt relief options before filing bankruptcy. The closest alternative to a bankruptcy is a consumer proposal. Book a free 1-on-1 consultation with our debt advocates to learn more about consumer proposals, other debt relief options, and how to get started.
How Your Finances Affect Your PR Application in Canada
While Canada debt and debt from your home country won’t stop you from getting permanent residency status, your financial stability may still be a concern for immigration authorities. This is because proof of funds is needed in many immigration applications to prove you can financially support yourself in Canada.
If you’re applying through a program like Express Entry, you’ll need to show that you have enough funds to provide for yourself and your family when you arrive. The minimum funds required depends on the amount of people coming with you to Canada. You can access fund requirements for immigration to Canada here.
You must prove you have legal access to this money. This means the money can’t be borrowed from someone else, and the worth of your assets don’t count. Funds under your spouse’s name can count, as long as you can prove you have free access to the funds.
If you have access to the minimum amount needed for immigration, you won’t need to worry about your debts when applying for PR in Canada.
What’s the Best Option if You Have Debt and Want to Immigrate or Sponsor Someone?
If you’re currently in debt and considering your immigration or sponsorship options, a consumer proposal is the most immigration-friendly form of debt relief. Unlike bankruptcy, it does not restrict sponsorship eligibility and allows you to retain your assets while settling your debt for less than you owe.
A consumer proposal can:
- Help you avoid bankruptcy
- Reduce your debt by up to 70–80%
- Allow you to keep your assets
- Leave a less severe R7 rating on your credit report (compared to R9 for bankruptcy)
To get started — or if you want to review your options more closely — contact the debt advocates at 4 Pillars. We help you understand the debt industry, your full range of debt relief options, and how each can affect your credit and immigration status.
We’re one of the only debt companies in Canada who work for you and you only. Most other companies work alongside or are funded by your creditors. But we aren’t here to sell you a product or help your creditors, we’re here to provide impartial, expert debt advice with information about your rights.
