Which debts can be included in bankruptcy or consumer proposal? - S.R. Stack & Company Ltd. Skip to content

Which debts can be included in bankruptcy or consumer proposal?

From income tax to student loans to vehicle loans, people often ask which debts can be consolidated via consumer proposal or bankruptcy.

When helping people consider their options for consolidating their debt one of the questions I often receive is can all of their debt be included.

People often assume that their income tax debt with the Canada Revenue Agency cannot be included however, that is incorrect, we can get rid of income tax via either a consumer proposal or a bankruptcy.

Another common assumption is that we cannot get rid of a vehicle loan or mortgage. This is also untrue however, there is a catch, if you want to get rid of the vehicle loan or mortgage you'll have to lose the vehicle or property is it connected to as well. This, sometimes, is the best decision for financial well being and is something we can discuss.

There are some debts, however, that we can't get rid of and those include:

  • Student loans that are less than seven (7) years old
  • Fines and penalties imposed by the court
  • Debts arising from recognizance or bail bond
  • Debts arising from fraud, embezzlement or obtaining property by false pretenses
  • Employment insurance overpayments
  • Alimony
  • Spousal support
  • Child support

If you have any questions about this and what options might be available to you give Sean a call at 709-221-5500.

Did You Know?


Many people who file for bankruptcy get to stay in their home.


In Newfoundland and Labrador, you can keep your RRSPs – even if you file for bankruptcy.


Many people who file for bankruptcy are able to keep their vehicle.


Most bankruptcies are NOT published in the newspaper.


Student loans can be included in a bankruptcy if they are more than seven (7) years old.


A consumer proposal is an alternative to bankruptcy that can only be filed with a licensed trustee in bankruptcy.


In NL, people ages 30 to 39 years old file for bankruptcy more than any other age group. [source]