Deep in debt? Consider a consumer proposal

If your debt is out of control and you can see no way out, filing for insolvency is an option that can help you get a handle on your finances and improve your credit history in the long run, experts say.

- SRIVINDHYA KOLLURU

If your debt is out of control and you can see no way out, filing for insolvency is an option that can help you get a handle on your finances and improve your credit history in the long run, experts say.

Insolvency refers to a financial state where you can’t pay your debts when they’re due, says Anne Arbour, director of partnerships and education at Credit Counselling Society.

The Office of the Superintendent of Bankruptcy (OSB) reported that more than 35,000 Canadians filed for insolvency in the second quarter of 2024, representing a 12.3 per cent jump from last year.

Once you’re insolvent, you have two main options: file for bankruptcy or opt for a consumer proposal, the latter of which is far more common, say Arbour and Doug Hoyes, co-founder of personal insolvency firm Hoyes, Michalos & Associates.