Consumer Proposal and Bankruptcy in Ontario: Exemptions, Credit Report Rules, and the Garnishment Stay

In Ontario, a consumer proposal or personal bankruptcy is filed under the same federal Bankruptcy and Insolvency Act used across Canada, but what property you keep and how long the record affects your credit report both come from two Ontario statutes: the Execution Act and the Consumer Reporting Act.

Information last verified on 2026-09-24. This article has not yet been reviewed by a licensed lawyer.

This article covers the two things Ontario adds on top of the federal insolvency process: the province's exempt-property list under the Execution Act, RSO 1990, c E.24, and O. Reg. 657/05, and its own credit-reporting retention rule under the Consumer Reporting Act, RSO 1990, c C.33. It also covers how the federal stay of proceedings affects wage garnishment while an Ontario consumer proposal is active. For how a consumer proposal or bankruptcy actually works, including the current 250,000 dollar debt ceiling, the five-year term, creditor voting, discharge timelines, and mandatory counselling, see Consumer Proposals in Canada: How They Work and How Personal Bankruptcy Works in Canada; this article does not repeat that material. For a side-by-side comparison of the two options, see Consumer Proposal vs. Bankruptcy in Canada.

What Property You Keep in Ontario

The federal Bankruptcy and Insolvency Act does not list what a bankrupt keeps; s.67(1)(b) folds in whatever exemption law the debtor's own province already has. In Ontario, that is the Execution Act, RSO 1990, c E.24, together with O. Reg. 657/05, which supplies the actual dollar figures.

The Execution Act itself, s.2(1), lists household furnishings and appliances, tools of trade, and one motor vehicle as exempt up to the prescribed amount, and s.2(2) protects principal residence equity the same way. O. Reg. 657/05, s.1, is what actually sets each prescribed amount, and it is one of the more recently updated exemption regulations in the country: its own amendment footer lists O. Reg. 393/25 as the latest amendment to those amounts. That still does not make the figures permanent; check the regulation's own current-to date before relying on these amounts well after this article's own verification date.

Clothing is exempt under the Execution Act itself as necessary clothing, with no dollar figure attached at all, unlike the four categories above.

Ontario exempts a principal residence only where the debtor's equity in it does not exceed a dollar cap, and the Execution Act, s.2(3), makes the residence subject to seizure and sale if the equity exceeds that cap; Quebec, Nova Scotia, New Brunswick, and Prince Edward Island have no equivalent exemption in the provisions reviewed. See Bankruptcy and Consumer Proposal Exemptions in Canada for how Ontario's figures compare across all ten provinces and three territories, including which provinces use a needs-based test instead of a dollar cap and which have no home-equity exemption at all.

How Long It Affects Your Credit Report in Ontario

Ontario's Consumer Reporting Act, RSO 1990, c C.33, s.9(3)(e), states that a consumer reporting agency shall not include information about the bankruptcy of a consumer in a report after 7 years from the date of discharge, unless the consumer has been bankrupt more than once. The Act never names a consumer proposal separately; a consumer proposal instead falls under the Act's general adverse-information catch-all at s.9(3)(k), which excludes any other adverse item of information more than 7 years after it was acquired or last reaffirmed. In practice, both a bankruptcy and a consumer proposal reach the same 7-year period in Ontario, just through two different clauses of the same section.

A second (repeat) bankruptcy removes the ordinary 7-year cap in s.9(3)(e), but the Act does not say what, if anything, applies once that cap is disapplied. Whether the general 7-year catch-all in s.9(3)(k) then operates as a fallback, or whether the more specific bankruptcy clause displaces it entirely and leaves no stated cap, is not resolved by the plain text of the Act. Do not rely on a specific figure, such as 14 years or an indefinite period, for a repeat bankrupt in Ontario; it is not supported by the statute.

Ontario's 7-year figure is longer than British Columbia, Alberta, and Manitoba's 6-year period for the same information, and matches Quebec's 7-year general rule. See Bankruptcy and Consumer Proposal Exemptions in Canada for the full provincial comparison.

The Stay of Proceedings and Wage Garnishment in Ontario

Filing a consumer proposal triggers an automatic stay of proceedings under BIA s.69.2(1), verbatim: "Subject to subsections (2) to (4) and sections 69.4 and 69.5, on the filing of a consumer proposal under subsection 66.13(2)... in respect of a consumer debtor, no creditor has any remedy against the debtor or the debtor's property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy" until the proposal is withdrawn, refused, annulled, or the administrator is discharged. This is the provision that stops wage garnishment and collection calls for an unsecured debt once a consumer proposal is filed. It does not stop support enforcement: BIA s.69.41(1) provides that the stay provisions "do not apply in respect of a claim referred to in subsection 121(4)", which covers child and spousal support owed under a court order or agreement. A support deduction order or garnishment enforced by the Director of Ontario's Family Responsibility Office can therefore continue after you file. It does not apply if the same debtor filed a previous consumer proposal within the preceding 6 months (s.69.2(2)).

The stay does not reach a secured creditor's own security. Under s.69.2(4), filing a consumer proposal does not prevent a secured creditor from realizing on or otherwise dealing with its security unless a court orders otherwise, and a court-ordered postponement of a secured creditor's rights is generally capped at 6 months. In practice, a mortgage lender or vehicle lender that has not filed a proof of claim in the proposal can generally continue enforcing its own security. An ordinary bankruptcy carries an equivalent stay under BIA s.69.3, with the same secured-creditor carve-out under s.69.3(2). See How Personal Bankruptcy Works in Canada for that side of the process.

For how wage garnishment itself normally works in Ontario outside of an insolvency filing, including the process a creditor must follow, see Wage Garnishment in Ontario and Debt Collection Rules in Ontario. For what happens if payments under an Ontario consumer proposal are missed, including the deemed-annulment rule, see Consumer Proposals in Canada: How They Work, which covers that federal rule in full rather than repeating it here.

Disclaimer: This article provides general information about Ontario's property exemptions and credit-reporting retention rule for a consumer proposal or bankruptcy filed under the federal Bankruptcy and Insolvency Act, current as of September 2026. It is not legal advice. It does not restate the full federal insolvency process, which is covered on the linked pages, and the repeat-bankruptcy credit-report question noted above is not resolved by the plain text of the Consumer Reporting Act. Consult a Licensed Insolvency Trustee or a lawyer licensed in Ontario for advice on your specific situation.

Frequently Asked Questions

What property can I keep if I file a consumer proposal or go bankrupt in Ontario?

Under the Execution Act and O. Reg. 657/05, you can keep household furnishings and appliances up to 17,091 dollars, tools of trade up to 17,362 dollars (37,820 dollars for a farmer's tools, livestock, and equipment), one motor vehicle up to 8,578 dollars, and your principal residence if your equity in it does not exceed 12,997 dollars. Necessary clothing is exempt with no dollar cap.

How long does a consumer proposal or bankruptcy stay on my credit report in Ontario?

7 years from the date of discharge for a bankruptcy, under the Consumer Reporting Act s.9(3)(e). A consumer proposal is not named separately in the Act but reaches the same 7-year period through its general adverse-information catch-all in s.9(3)(k).

Does filing a consumer proposal in Ontario stop wage garnishment?

For most unsecured debts, yes. BIA s.69.2(1) creates a stay of proceedings on filing that stops creditors from starting or continuing collection, including wage garnishment, for a claim provable in the proposal. It does not stop enforcement of child or spousal support, including a Family Responsibility Office garnishment, because BIA s.69.41 excludes support claims from the stay. It also does not stop a secured creditor, such as a mortgage or vehicle lender that has not filed a proof of claim, from continuing to enforce its own security under s.69.2(4).

Are Ontario's exemption amounts current?

Yes, as of this article's verification date. O. Reg. 657/05's own amendment footer lists O. Reg. 393/25 as the latest amendment to the exemption amounts. Check the live regulation before relying on these figures well after this article was last verified.

What happens to the credit report retention period if I have been bankrupt before in Ontario?

The ordinary 7-year cap in s.9(3)(e) does not apply to someone who has been bankrupt more than once, but the Consumer Reporting Act does not state a replacement figure for that situation. A specific number such as 14 years, or an indefinite period, is not supported by the statute text.

Where can I find the full rules for how a consumer proposal or bankruptcy works?

This article covers only what is specific to Ontario. For the federal process itself, including eligibility, the debt ceiling, term, creditor voting, and discharge timelines, see Consumer Proposals in Canada: How They Work and How Personal Bankruptcy Works in Canada.