Leaving Canada With Debt: A One-Way Ticket Home

Moving home can change a person’s plans without ending their financial obligations. Maya’s story brings together the questions to ask before leaving Canada with debt.

By Paul Franchi, JD, MBA, CIRP, LIT, Founder and Licensed Insolvency Trustee

About Paul Franchi, Licensed Insolvency Trustee

In this feature

1. The offer, and the questions behind it
2. A changing backdrop
3. The immigration questions still matter
4. What the Bankruptcy and Insolvency Act actually tests
5. Check the immigration requirements that apply to you
6. Sponsoring a spouse or family member
7. Earlier sponsorship obligations and support payments
8. Citizenship, proof of funds and disclosure
9. Bring the relevant documents to the first meeting
10. What happens if I leave Canada with debt?
11. The creditors' choice
12. Debts and property do not stop at the border
13. Before you book the next step
14. Further reading

When Maya showed me her plane ticket, she had already made her decision.

One way. Back to Nepal.

She had come to Canada expecting to build on the life she had begun in Kathmandu. She had qualifications, banking experience and relatives here who encouraged her to join them. At first, things seemed to be going to plan. She found work in a bank. She married. There was a salary coming in and someone to build a life with.

Her husband’s part-time earnings helped, but her pay carried most of the household expenses. Rent, groceries and transportation left little room for saving. Back home, her family knew she worked at a Canadian bank. They imagined she was doing well. Maya kept sending money, even when there was barely enough for herself.

The bills were paid, or pushed into the next month. Savings never seemed to grow, apart from the money in her registered retirement savings plan. She had come for a better life. Increasingly, she felt she was working simply to afford being here.

Money became a source of tension in the marriage. Eventually, they separated. Maya was left with household bills, existing debts and the expense of finding a lawyer to deal with the separation.

She wanted to go home. Before she left, she wanted to see whether a consumer proposal could settle her debts. Our Consumer Proposal Resource Centre explains how a proposal works.

The offer, and the questions behind it

She offered a small monthly payment over a fixed term, together with a lump sum from her retirement savings. Every consumer proposal states its own payments and term, and the law requires it to be completed within five years. This example does not supply a payment formula for another person’s proposal. For more detail, read How a consumer proposal payment is calculated, and why it is not a percentage of your debt.

Money in an RRSP is generally protected from creditors in a bankruptcy, apart from contributions made in the twelve months before the bankruptcy. Putting it into a proposal was Maya’s choice. The contents the law requires of every consumer proposal do not include it, and the trustee must go through the options and their consequences with a debtor before a choice is made. For more detail, read Disadvantages of consumer proposal filings: the real consequences, fear by fear.

Maya’s offer was modest. It was the limit of what she felt prepared and able to put forward. But a proposal is not simply what a debtor is willing to pay. The Licensed Insolvency Trustee, acting as administrator, must investigate the debtor’s property and finances and, within ten days after filing the proposal, must send every known creditor a report giving an opinion on whether the proposal is reasonable and fair to the debtor and to the creditors, and whether the debtor will be able to carry it out.

“This is all I can offer,” she said. “If they won’t accept it, I want to understand what bankruptcy would mean for me once I’m living abroad. I’m going home.”

Her creditors accepted the proposal, with the administrator’s report in hand. That was the outcome in Maya’s story. Her plane ticket did not create a rule requiring acceptance, and one acceptance says nothing about how creditors will treat another offer.

Leaving Canada did not end the proposal. The payments were still due from wherever she lived; had she fallen behind by three monthly payments, the proposal would have been annulled by operation of the law, unless an amendment had been filed or the court had ordered otherwise. For more detail, read Cancelling, getting out of, or changing a consumer proposal.

Maya’s decision raises a different set of questions from the ones people ask when they arrive. Can someone file before leaving? Can the duties be fulfilled abroad? If a hearing is needed, must the person come back? And what exactly are creditors comparing when they consider an offer?

A changing backdrop

Canada’s migration figures give those questions a wider setting. They do not tell us why any particular person leaves, whether that person owes money, or whether an insolvency filing follows.

In the twelve months to June 2026, the temporary-resident series recorded 441,442 arrivals and 596,056 departures. Every twelve-month window from the one ending September 2025 showed more temporary residents leaving than arriving. Departures include permits that ended. These numbers cannot establish that debt or living costs caused people to leave.

See the numbers

12 months to	Arriving	Leaving
June 2026	441,442	596,056
March 2026	459,770	586,843
December 2025	494,481	583,926
September 2025	565,807	607,143
June 2025	670,510	636,205
March 2025	780,844	640,631
December 2024	938,420	635,730
September 2024	1,083,491	604,295
June 2024	1,245,885	542,679
March 2024	1,297,290	486,770
December 2023	1,232,873	476,184
September 2023	1,187,694	442,475
June 2023	1,078,749	428,510
March 2023	1,000,410	422,440
December 2022	919,779	398,587
September 2022	801,585	450,588
June 2022	703,698	483,060

The flow of new permanent residents also changed: 368,224 in the twelve months to June 2026, compared with 435,551 a year earlier. These are admissions, not departures, and they describe a different population from the temporary-resident series.

See the numbers

12 months to	New permanent residents
June 2026	368,224
March 2026	372,603
December 2025	393,781
September 2025	414,164
June 2025	435,551
March 2025	466,196
December 2024	483,654
September 2024	480,622
June 2024	464,344
March 2024	448,099
December 2023	471,817
September 2023	454,702
June 2023	468,913
March 2023	469,305
December 2022	437,612
September 2022	492,519
June 2022	493,236
March 2022	449,357
December 2021	406,046
September 2021	309,111
June 2021	226,314
March 2021	185,946
December 2020	184,594
September 2020	220,559
June 2020	284,153
March 2020	344,361
December 2019	341,174
September 2019	335,024
June 2019	313,603
March 2019	307,000
December 2018	321,054
September 2018	315,527
June 2018	303,369
March 2018	293,707
December 2017	286,537
September 2017	274,597
June 2017	272,694
March 2017	282,976
December 2016	296,385
September 2016	312,516
June 2016	323,188
March 2016	306,984
December 2015	271,867
September 2015	254,132
June 2015	240,775
March 2015	246,976

The questions about arriving, studying and sponsoring family have not gone away. They belong beside the newer question of how to deal with debt when someone has decided to leave. For more detail, read Debt, Bankruptcy and Immigration in Canada: What Newcomers and Sponsors Need to Know.

The immigration questions still matter

International students can qualify for bankruptcy or a consumer proposal while studying in Canada. Canadian citizenship and permanent resident status are not requirements under the Bankruptcy and Insolvency Act.

A young international student living in Canada on a study permit may be struggling with credit cards, loans and living expenses while trying to finish a degree.

The starting point is whether the person meets the Canadian connection and financial requirements. A Licensed Insolvency Trustee can assess those facts and explain the available debt options. Any effect on a particular immigration application needs to be considered alongside that assessment. For more detail, read Debt help and debt relief options in Canada.

What the Bankruptcy and Insolvency Act actually tests

Section 2 of the Act defines an “insolvent person”. For someone who is not already bankrupt, the definition requires a connection to Canada, qualifying debts of at least $1,000 and one of three financial conditions.

The Canadian connection can be residence, carrying on business or having property in Canada. Any one of these is sufficient. A student who lives here while studying can meet the residence requirement; the trustee confirms that connection on the person’s actual circumstances.

The $1,000 requirement concerns liabilities to creditors that are provable as claims under the Act. The person must also meet at least one of the following financial tests.

1. They are, for any reason, unable to meet their obligations as those obligations generally become due.
2. They have stopped paying their current obligations in the ordinary course of business as those obligations generally become due.
3. Their property, taken together, is not enough at a fair valuation, or would not be enough if sold at a fairly conducted sale under legal process, to pay all their obligations, due and accruing due.

These tests address the person’s ability to pay and the value of their property. The trustee reviews income, expenses, debts and assets to determine whether a test is met and which proceeding is available. A consumer proposal has additional eligibility requirements of its own.

Check the immigration requirements that apply to you

A student also needs to consider the requirements of the study permit or any application to extend it. The study-permit rules require enough available money, without working in Canada, to pay tuition, living expenses for the student and any family members who come with them, and travel to and from Canada for all of them. When applying for a study permit, the student must show funds for the first year of studies and, for a program longer than a year, tell IRCC how they plan to pay for the full duration of their studies. Tuition, living expenses and available resources therefore belong in the discussion.

Immigration law has a separate financial-inadmissibility provision concerning a foreign national’s ability and arrangements to support themselves and their dependants without social assistance. That assessment is different from the BIA’s insolvency tests. A person can meet an insolvency test while still having adequate arrangements for support.

If financial support has been raised in an application, take the actual requirement and the evidence of resources to qualified immigration counsel. I am a Licensed Insolvency Trustee with a legal and finance background; I do not practise immigration law.

Sponsoring a spouse or family member

For sponsors outside Quebec, the federal sponsorship rules require that the sponsor not be an undischarged bankrupt from the day the application is filed until the day it is decided. A consumer proposal does not itself trigger that bankruptcy bar. Approval still depends on the other sponsorship requirements.

Someone with a sponsorship application pending should obtain advice before choosing a debt solution, with the application dates available for review. The effect of the proposed filing on that application is the question that needs an answer.

Quebec has a separate sponsorship process. A Quebec sponsor needs advice based on that process rather than an assumption that the federal requirements operate in the same way.

Earlier sponsorship obligations and support payments

If you previously sponsored someone and a government paid social assistance to that person, identify the resulting obligation. A debt owed to government and a sponsorship default raise different issues.

Our guide identifies an unresolved question about whether an insolvency release or a completed proposal satisfies the immigration requirement for ending a sponsorship default. Someone wishing to sponsor again needs advice on that question before relying on a debt settlement as the answer. For more detail, read Debt, Bankruptcy and Immigration in Canada: What Newcomers and Sponsors Need to Know.

Court-ordered support payments and any arrears also need to be identified separately. They should not disappear into a general statement about restructuring debt.

Citizenship, proof of funds and disclosure

For citizenship, our guide distinguishes the requirement to file tax returns from payment of tax debt. Someone worried that an unpaid balance prevents citizenship needs the actual filing requirement checked, rather than an assumption that owing money is itself a citizenship barrier. For more detail, read Debt, Bankruptcy and Immigration in Canada: What Newcomers and Sponsors Need to Know.

For Express Entry, the published proof-of-funds instructions reviewed for our guide ask for information that includes outstanding debts. The person should check the requirements of the particular program and provide the financial information it asks for.

Application questions must be answered truthfully. The availability of a public insolvency record does not replace the duty to disclose what an application asks. Keep the immigration forms and insolvency documents accurate as of their respective dates.

Bring the relevant documents to the first meeting

A student can bring their permit and any pending application, records of tuition and living expenses, and a list of income, assets and debts. A person planning to sponsor can also bring the sponsorship application, its dates and details of any earlier undertaking or support obligation.

That gives the trustee the financial facts needed to assess debt options and gives immigration counsel the application facts needed to assess the immigration questions.

What happens if I leave Canada with debt?

The timing and the Canadian connection matter. Planning to leave later does not replace the eligibility assessment on the day of filing. A person who has already left needs advice on the connection that remains; a Canadian consumer proposal is not something anyone can file from anywhere.

Statistics Canada’s separate emigration series estimates that 112,116 citizens and permanent residents emigrated in the twelve months to June 2026. That is close to the 113,291 in the twelve months to June 2023. It should not be described as a new record or surge. The agency changed its method in July 2016 and models the latest quarters.

See the numbers

12 months to	Emigrants
June 2026	112,116
March 2026	111,852
December 2025	111,572
September 2025	111,298
June 2025	110,914
March 2025	110,238
December 2024	109,535
September 2024	108,840
June 2024	107,876
March 2024	109,403
December 2023	112,561
September 2023	112,302
June 2023	113,291
March 2023	113,067
December 2022	110,172
September 2022	108,415
June 2022	99,756
March 2022	91,567
December 2021	83,357
September 2021	75,775
June 2021	66,627
March 2021	56,958
December 2020	60,407
September 2020	64,221
June 2020	77,591
March 2020	89,762
December 2019	90,460
September 2019	92,588
June 2019	92,204
March 2019	94,731
December 2018	97,035
September 2018	96,858
June 2018	98,271
March 2018	100,533
December 2017	104,013
September 2017	109,890

Can a bankrupt leave Canada?

Canadian bankruptcy law does not require you to stay in Canada after you file, and it does not take your passport. That does not mean that the process can be left behind.

A bankrupt’s duties follow the bankrupt. The law requires you to keep the trustee informed of your address at all times until your discharge is dealt with and the estate is closed, to report any material change in your finances, to hand over your property and records, to attend the official receiver’s examination at the time and place fixed and other examinations when required, and to attend the first meeting of creditors, if one is held, unless sickness or another sufficient cause prevents you.

Your surplus income is assessed on all of your income, from any country, and you must give monthly statements and proof of income for the whole bankruptcy. If you stop providing information or paying surplus income, your trustee must oppose your discharge.

Most of what a bankrupt must do, such as handing over records, reporting income monthly and paying surplus income, can be done from anywhere; the exceptions are the counselling sessions, which are held in person unless you choose video and your trustee agrees, and the examinations and meetings you must attend, whose time and place are set by the official receiver, the trustee or the court.

Do not make travel arrangements on the assumption that every required step can be completed online. Work through the arrangements with the trustee before leaving. Whether an examination or meeting can be attended remotely is not the debtor’s decision alone.

Leaving Canada to avoid paying your debts or to avoid being examined can lead to an arrest warrant. So can removing property in your possession worth more than $25 without your trustee’s permission, or disobeying a court order, whatever the reason for the move. Leaving for work, family or cost of living reasons while keeping up your duties is a different thing from absconding.

Would you have to return for a discharge hearing?

No federal rule gives you a right to attend your discharge hearing by video, and none forbids it; the court decides how the hearing is held.

In Toronto the registrar in bankruptcy hears contested discharge applications by videoconference, and in Hamilton virtually, unless the registrar orders an in-person hearing, and unopposed or consent applications are decided in writing; in Northeast Ontario the registrar hears all bankruptcy matters in writing or by video conference, and may order an in-person hearing.

In Alberta, the Court of King’s Bench lists bankruptcy hearings with a default mode of remote; a different mode needs the court’s approval, and the court can order an electronic hearing to be completed in person.

These are particular courts’ ways of proceeding. They are not a promise that someone in any country can attend any Canadian hearing by video. The registrar can require attendance in person and can summon the bankrupt for examination. Giving evidence from abroad may also raise questions about the oath, the foreign location and the court’s technical requirements.

If you miss your duties while abroad, your trustee or a creditor can oppose your discharge; the court can then refuse it, delay it or attach conditions, and until that is resolved you remain bankrupt.

Can a consumer proposal continue from abroad?

You can perform a consumer proposal while living abroad if your payments arrive on time, you complete the two counselling sessions, and your administrator can reach you. Counselling can be done by videoconference if you choose it and your administrator agrees it is workable. See the Consumer Proposal Resource Centre for more on the proposal process. For more detail, read The Consumer Proposal Timeline, Month by Month.

If your payments are monthly, falling behind by the amount of three payments annuls the proposal automatically unless the court has ordered otherwise or an amendment was filed first, and the court can annul it on application for any default. After an annulment, unless the court orders otherwise, you cannot file another consumer proposal and have no stay protecting you until the accepted claims are paid in full or released by a bankruptcy discharge, and your creditors’ rights revive for what you owed, less what they received. Your administrator can revive the proposal if no creditor objects within the time allowed, or ask the court to. For more detail, read Cancelling, getting out of, or changing a consumer proposal.

If you are not already bankrupt, filing a consumer proposal does not make you bankrupt. Under the Act, you are an insolvent person dealing with your debts through a proposal.

If you are already bankrupt, filing a consumer proposal does not immediately end the bankruptcy. You remain bankrupt while the proposal goes through the approval process. Once the court approves the proposal, or it is deemed approved, the bankruptcy is annulled and you carry out the proposal instead.

If you were not bankrupt when you filed the proposal, its failure does not automatically put you into bankruptcy. You can still become bankrupt later by filing for bankruptcy yourself or through a court order on a creditor’s application.

The creditors’ choice

In Maya’s story the creditors accepted. The law does not promise that result.

Consumer proposals now account for most Canadian consumer insolvency filings. In April to June 2026, 28,923 of the 37,523 filings were proposals, about 77%. The chart shows the national mix of proceedings. It says nothing about migration, Maya’s circumstances or the likelihood that another proposal will be accepted.

See the numbers

Quarter	Proposals	Bankruptcies	Total
April to June 2026	28,923	8,600	37,523
January to March 2026	29,545	7,576	37,121
October to December 2025	27,144	7,718	34,862
July to September 2025	28,469	7,787	36,256
April to June 2025	27,314	7,800	35,114
January to March 2025	27,241	6,984	34,225
October to December 2024	26,541	7,199	33,740
July to September 2024	27,341	7,247	34,588
April to June 2024	27,337	7,745	35,082
January to March 2024	27,036	6,849	33,885
October to December 2023	25,235	6,578	31,813
July to September 2023	24,043	6,428	30,471
April to June 2023	24,279	6,945	31,224
January to March 2023	23,460	6,265	29,725
October to December 2022	20,065	5,820	25,885
July to September 2022	19,579	6,281	25,860
April to June 2022	18,776	6,510	25,286
January to March 2022	17,178	5,975	23,153
October to December 2021	15,774	6,492	22,266
July to September 2021	14,789	6,324	21,113
April to June 2021	15,564	7,325	22,889
January to March 2021	16,504	7,320	23,824
October to December 2020	15,509	7,855	23,364
July to September 2020	13,543	7,164	20,707
April to June 2020	12,747	6,413	19,160
January to March 2020	21,779	11,448	33,227
October to December 2019	21,627	13,528	35,155
July to September 2019	20,951	13,757	34,708
April to June 2019	20,728	14,348	35,076
January to March 2019	19,463	12,776	32,239
October to December 2018	18,315	13,585	31,900
July to September 2018	16,764	13,549	30,313
April to June 2018	17,862	14,794	32,656
January to March 2018	17,234	13,163	30,397
October to December 2017	16,063	13,962	30,025
July to September 2017	15,605	13,930	29,535
April to June 2017	16,193	15,761	31,954
January to March 2017	16,368	14,316	30,684
October to December 2016	14,938	15,185	30,123
July to September 2016	15,219	15,197	30,416
April to June 2016	16,628	17,635	34,263
January to March 2016	15,721	15,355	31,076
October to December 2015	14,557	15,595	30,152
July to September 2015	14,235	15,586	29,821
April to June 2015	14,700	17,078	31,778
January to March 2015	14,711	15,147	29,858
October to December 2014	13,263	15,911	29,174
July to September 2014	13,193	15,895	29,088
April to June 2014	13,622	17,396	31,018
January to March 2014	13,133	15,637	28,770
October to December 2013	12,160	16,670	28,830
July to September 2013	12,082	17,107	29,189
April to June 2013	13,060	18,812	31,872
January to March 2013	12,152	16,635	28,787
October to December 2012	11,543	17,117	28,660
July to September 2012	10,994	17,056	28,050
April to June 2012	12,188	19,087	31,275
January to March 2012	12,178	18,235	30,413
October to December 2011	11,342	18,660	30,002
July to September 2011	10,689	18,611	29,300
April to June 2011	11,397	20,696	32,093
January to March 2011	11,578	20,026	31,604
October to December 2010	10,927	22,436	33,363
July to September 2010	10,254	22,078	32,332
April to June 2010	10,666	24,792	35,458
January to March 2010	10,467	23,388	33,855
October to December 2009	10,289	25,042	35,331
July to September 2009	8,451	32,138	40,589
April to June 2009	8,590	31,659	40,249
January to March 2009	8,001	27,542	35,543
October to December 2008	7,041	24,956	31,997
July to September 2008	6,184	22,776	28,960
April to June 2008	6,274	22,412	28,686
January to March 2008	5,680	20,466	26,146
October to December 2007	5,426	19,589	25,015
July to September 2007	5,059	19,504	24,563
April to June 2007	5,492	20,871	26,363
January to March 2007	5,469	19,883	25,352
October to December 2006	4,986	19,288	24,274
July to September 2006	4,752	18,901	23,653
April to June 2006	4,734	20,401	25,135
January to March 2006	4,771	20,655	25,426
October to December 2005	4,565	20,505	25,070
July to September 2005	4,131	20,314	24,445
April to June 2005	4,856	22,756	27,612
January to March 2005	4,450	21,027	25,477

Contains information licensed under the Open Government Licence – Canada.

Before creditors vote, the administrator must give them a report with an opinion on whether the proposal is reasonable and fair to you and to them, and whether you can perform it. The profession’s standards say that report should compare what the proposal pays with what a bankruptcy would likely pay, including any surplus income payment you would have to make in a bankruptcy. For more detail, read Consumer proposal versus bankruptcy, worked line by line.

Creditors decide on a consumer proposal by voting the dollar value of their claims. If, by the end of 45 days after filing, neither the official receiver nor creditors holding a quarter of the proven claims by value have required a meeting, the proposal is treated as accepted, and if nobody asks the court to review it within the next 15 days it is treated as approved. For more detail, read The Consumer Proposal Timeline, Month by Month.

The law does not force creditors to accept the higher number, and it does not forbid them from accepting a proposal that pays less than a bankruptcy might. If the court is asked to review a proposal, it must refuse one whose terms are not reasonable or not fair to the debtor and the creditors, and judges have differed on how far a payout below the bankruptcy estimate counts against a proposal.

The comparison cannot simply assume that departure means creditors would receive nothing in a bankruptcy. Leaving Canada does not end a bankrupt’s duty to pay surplus income. The duty applies to income from any source earned during the bankruptcy; if the discharge is opposed, the payment duty under the surplus income section ends on the date the automatic discharge would have taken effect, and the court can still order an appropriate payment. A bankrupt who does not pay or does not report faces opposition to discharge and a court order fixing the amount, and a bankrupt who, without reasonable cause, disobeys that order or fails in a duty under section 158 commits an offence.

The trustee must assess the person’s actual finances and any material change in them. A lawful fall in income after moving is different from refusing to report or pay. Maya’s ticket establishes neither the bankruptcy recovery nor what another debtor should offer.

Debts and property do not stop at the border

Apart from exempt property and the other items the Act excludes, such as property you hold in trust for someone else and registered retirement and disability savings other than contributions made in the 12 months before the bankruptcy, everything you own at the date of bankruptcy, wherever in the world it is, and anything you acquire before discharge, belongs to the estate. Property you own outside Canada must be disclosed.

Exempt property is decided by provincial law for the province where the property is and where you live. Settle what is exempt with your trustee before you leave. Ontario and Alberta have different lists; check the list for any other province separately.

A creditor in another country is a creditor under Canadian law. It can prove its claim and share in the Canadian distribution, with any recovery it made abroad taken into account.

A Canadian bankruptcy discharge stops enforcement in Canada of the debts it releases. It does not, by itself, stop enforcement in another country. Whether creditors can enforce there depends on that country’s law. If you have debts or creditors in another country, or will have income or assets there, get advice in that country before you rely on the Canadian release there.

Some debts also receive special treatment within Canada. A bankruptcy discharge does not release support arrears owed under a court order or a support agreement. A proposal does not release them either, unless the proposal explicitly provides for compromising that debt and the support creditor votes to accept the proposal. In practice they survive both proceedings; in a proposal that survival is the default, not an absolute.

Do not assume that a debt is released because it appears on a list of creditors. Have the particular debt and the terms of the proceeding checked, including any debt outside Canada.

Before you book the next step

Maya had arrived hoping to build a future in Canada. She made a different choice about where that future would be. The financial work still had to be done.

For someone considering the same move, the useful first conversation is specific: where will you live, what will you earn, what property and debts do you have, and how will you meet the obligations of the proceeding from there? Bring the financial records, the immigration documents and the proposed travel dates together. For more detail, read What Really Happens When You Meet a Licensed Insolvency Trustee in Canada?.

A ticket can settle where you are going. It does not settle the terms on which you leave your debts behind.

Further reading

• Debt, Bankruptcy and Immigration in Canada: What Newcomers and Sponsors Need to Know
• Consumer Proposal Resource Centre
• The Consumer Proposal Timeline, Month by Month
• Your credit after a consumer proposal or bankruptcy: R7, R9, and the honest answers
• What Really Happens When You Meet a Licensed Insolvency Trustee in Canada?
• Mortgage Trouble
• From The Papers Series, A condo purchaser’s nightmare, revisited: closing, default and the cost of ownership

Source note. The immigration passages retain their 2 October 2026 legal-check date. The departure and story passages draw on the research returns issued on 5 October 2026, with the individual source and practice-direction dates recorded in the accompanying review ledger. The immigration statutes and IRCC instructions, and court practices, can change. Obtain advice on the actual proceeding and immigration application, including advice in another country where relevant.