The collection agency calls. The fear of opening the mail. Working out, every month, what can be pushed back a little longer.

When debts exceed the ability to pay, there are solutions provided by law. This article explains how each one works. It does not say which to take: that depends on too many things an article cannot know about your situation.

The key point

Four routes, from lightest to heaviest: a direct arrangement, voluntary deposita protection unique to Quebec that stops seizures, a consumer proposal and bankruptcy. Before choosing one, you can talk it through free of charge with an ACEF, which sells none of these services.

The first reflexTalk to someone who is not selling you anything

When you search for "bankruptcy" online, you mostly land on trustee firms. These are professionals regulated by law, and their work is useful, but the consumer proposal and bankruptcy are their business. That is what they offer.

ACEFs, the cooperative family economy associations, offer budget consultations free or at low cost, across Quebec. They sell no insolvency service. It is the most neutral starting point for understanding where you stand before committing.

One thing to know right away: talking to someone commits you to nothing. Neither a meeting with an ACEF nor a consultation with a trustee obliges you to undertake anything.

Before going further: see what a plan gives you

The four routes below are for someone who can no longer repay. If you can still pay something, a well-chosen repayment order sometimes changes everything, and buys you months.

Our repayment planner compares the two recognised methods: the avalanche (highest interest rates first, to pay less overall) and the snowball (smallest debts first, for momentum). It shows you the order to follow, the number of months to the finish, and the interest each method saves you.

It is free and everything happens on your device: your figures are sent nowhere, and nobody but you sees them. If you hesitate to write your debts down anywhere, that is exactly why it is built this way.

The optionsThe four routes, one by one

1
A direct arrangement with creditors
The simplest, and often the first tried: you negotiate a new schedule, a reduced payment, a freeze on interest. Nothing obliges a creditor to accept, but many prefer an arrangement to a file that brings in nothing. An ACEF adviser can negotiate with you or for you. This route leaves no particular mark on your credit file, beyond the late payments already recorded.
2
Voluntary deposit, the Quebec protection
A measure that exists only in Quebec, and that few people know about. You register with the civil division of the Court of Québec in your district, then regularly deposit a portion of your income. That portion is calculated by law, based on your income and the number of dependants. As long as you keep up the deposits: no more wage garnishment, no more seizure of movable property, no more lawsuits, and the interest on your debts drops to 5% if it was higher.
3
The consumer proposal
An offer made to your creditors, prepared with a licensed insolvency trustee: you propose to repay part of what you owe, over a period of at most five years. If the creditors accept it, it becomes the agreement binding you to them. It is available as long as your total debts do not exceed $250,000. It avoids bankruptcy while stopping the recourses of the creditors covered.
4
Bankruptcy
The heaviest route. It releases you from a large part of your debts in exchange for handing over certain assets, and also goes through a licensed trustee. It leaves the longest mark on your credit file. To use it, as for the proposal, you must be insolvent: no longer able to pay your debts as they fall due, having stopped paying your current bills, or holding assets worth less than what you owe.
The limit of voluntary deposit, to know before relying on it

Its protection against seizure does not cover goods bought on instalment that you do not yet own, a financed vehicle or appliance, for example. The seller can still take it back. That is the question to ask before counting on this protection.

AfterwardsWhat each leaves on your credit file

This is often what worries people most, and the information circulates badly.

  • Consumer proposalremoved from the file three years after full payment of the debts it covers, or six years after signing: whichever comes first applies.
  • Bankruptcyrecorded for six to seven years after discharge. In the case of a second bankruptcy, that period can extend to fourteen years.

A damaged credit file can be rebuilt. It is not a permanent mark, nor is it a reason to postpone a decision indefinitely: interest keeps running while you hesitate.

Why this article does not tell you what to do. The right choice depends on what you earn, what you owe, what you own, who else signed with you, and what you want to protect. An article knows none of that. What it can do is stop you arriving without knowing what exists.

Frequently askedYour questions

What is voluntary deposit?

It is a measure unique to Quebec. You register with the civil division of the Court of Québec in your district, then regularly deposit a portion of your income, calculated by law based on your income and the number of dependent children. As long as you keep up the deposits, your creditors can no longer garnish your wages or seize your movable property, nor sue you. Interest on your debts drops to 5%, unless it was already lower.

Does voluntary deposit protect against every seizure?

No, and this is an important limit to know. The protection against seizure does not apply to goods bought on instalment that you do not yet own. The seller can therefore still take them back.

What is a consumer proposal?

It is an offer you make to your creditors to settle your debts, prepared with a licensed insolvency trustee. If it is accepted, it becomes your repayment agreement, over a period of at most five years. Your total debts must not exceed $250,000 to use it.

How long does a bankruptcy or a proposal stay on a credit file?

A consumer proposal is removed from the file three years after full payment of the debts it covers, or six years after signing, whichever comes first. A bankruptcy stays for six to seven years after discharge, and up to fourteen years in the case of a second bankruptcy.

Who can I talk to free of charge before deciding?

The ACEFs, the cooperative family economy associations. They offer free or low-cost budget consultations across Quebec, and they sell no insolvency service, which makes them a neutral starting point. A licensed trustee can also explain the options, bearing in mind that the proposal and bankruptcy are their business.

Read nextRelated articles

Budgeting when money is tight
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Getting back on your feet financially: where to start
Social assistance, work, budget and taxes, one step at a time.

Official sources

✓ Rules, deadlines and conditions verified on 4 August 2026

About this article. General and educational information, accurate as of the date shown. It does not replace legal or financial advice tailored to your situation, and it recommends none of the routes described. Before committing, talk to an ACEF or a licensed insolvency trustee. BetterWorld is affiliated with neither the Government of Quebec, nor the Government of Canada, nor any trustee firm.

Spotted an error or an out-of-date figure? Write to us: we will correct it and re-date the article. Our texts are written with the help of artificial intelligence and checked against official sources before publication, but an amount or a rule can change without us catching it. If anything here does not match what an official body tells you, they are right.