Canadian · Debt relief
Debt-to-income and insolvency threshold check.
Check the two legal thresholds that decide whether a consumer proposal is open to you, the $250,000 debt limit and the insolvent person tests, and see your debt-to-income ratio for context.
A consumer debtor owes no more than $250,000, not counting debts secured on the principal residence. An insolvent person owes at least $1,000 and meets one of three tests: cannot pay debts as they fall due, has stopped paying, or has property worth less than the debts.
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Threshold results
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The two legal thresholds
Consumer debtor. BIA s. 66.11 defines a consumer debtor as an individual who is bankrupt or insolvent and whose aggregate debts, excluding any debts secured by the individual's principal residence, are not more than $250,000 or any other prescribed amount. Only a consumer debtor can make a consumer proposal under Division II.
Insolvent person. Section 2 defines an insolvent person as someone who is not bankrupt, who resides, carries on business or has property in Canada, whose liabilities provable as claims amount to $1,000, and who (a) is unable to meet obligations as they generally become due, (b) has ceased paying current obligations as they generally become due, or (c) has property that is not, at a fair valuation, sufficient to pay all obligations. A person who is already bankrupt also meets the consumer debtor definition.
What this tool leaves out
It does not test whether a particular debt is provable, how a trustee values property, or whether a Division I proposal applies above the limit. The "prescribed amount" alternative in s. 66.11 is not modelled; none is applied here. Debt-to-income ratios are used by lenders and counsellors but do not appear in the Act.
Sources, read 16 October 2026: Justice Laws - Bankruptcy and Insolvency Act, OSB - Consumer proposals, OSB - Considering bankruptcy, OSB - What is a Licensed Insolvency Trustee?.
Frequently asked questions
What is the debt limit for a consumer proposal in Canada?
$250,000, not counting debts secured on your principal residence (BIA s. 66.11).
Does my mortgage count toward the limit?
A mortgage on your principal residence does not. A mortgage on a rental or second property does count.
What counts as insolvent?
Owing at least $1,000 and being unable to pay as debts fall due, having stopped paying them, or owning property worth less than the debts (BIA s. 2).
Is there a debt-to-income cutoff for bankruptcy?
Not in the Act. The thresholds are the ones listed above; a ratio is only context.
Estimate only — not legal advice
Estimate only. This tool is not legal, financial or insolvency advice. A Licensed Insolvency Trustee decides the figures that apply to you. Figures follow OSB Directive 11R2-2026 and the Bankruptcy and Insolvency Act and General Rules as published on 16 October 2026; they change, so confirm them. Nothing you enter is sent anywhere or stored.