Can you go to jail in Canada for not paying debt?

Can you go to jail in Canada for not paying debt?

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Throughout history, society has recognized the value of allowing borrowing, to be paid back with future earnings. Unfortunately, things do not always go as planned, at times making payback of borrowed funds difficult if not impossible. In the past, if a person was not able to pay their debts, they may have been apprehended and thrown into debtor’s prison.

In today’s world, society still recognizes the value of debt. However, society now approaches insolvency situations (when a person can not pay their debts back) in a much more civilized manner, with prison not being one of the options.

If debt can not send a person to jail, what actions can a creditor take to recover money owed?


  • Creditors can call and send demand letters.
  • Creditors can sue and get Court Orders to seize bank accounts and/or garnishee wages.
  • Creditors can report payment activity to credit reporting agencies like Equifax and Transunion.
  • Creditors can engage the services of Collection Agencies or sell accounts to another company for collection. Note, this does not change the requirements to pay back debt. All legal remedies to collect remain the same.

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Are there any situations that could send a person to jail?

  • If debt is related to Court Fines and is not paid as directed by the Court, this could result in a Judge assigning a jail sentence.
  • Failure to pay child support and/or alimony could result in seizure of passport and/or other remedies. If passport is not surrendered as ordered, time in jail may be ordered by Court. In addition, depending on the laws in the province in which the support is due, failure to pay support may result in a jail sentence.
  • If debt is related to tax evasion or other fraudulent tax activities, remedies may include time in jail. Further, even if a sentence is not initially ordered by a Judge, subsequent failure to pay back as ordered could also result in time in jail.

Thankfully, for almost all types of debt, outside of the legal situations outlined above, jail is not something a person needs to worry about. However, even without the fear of incarceration, the stress from debt can be overwhelming and affect all parts of life.

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There are solutions to stop creditor actions and eliminate debt. A Consumer Proposal or Bankruptcy, which can only be administered by a Licensed Insolvency Trustee like Bromwich+Smith, will restructure the debt, and in most cases reduce or eliminate the amounts owed.

In the case of debt due to one of the listed legal situations, although these amounts can not be included in a Consumer Proposal or bankruptcy, a debt restructuring programs could still be beneficial. Other debts outside of these legal situations are eligible to be included. Therefore, with these debts under control, a person may then have the funds available to more comfortably service fines, penalties and other legal actions.

No matter how difficult or complicated your financial situation may seem, you can rest assured that there are always options to explore. Contact Bromwich+Smith today for your free consultation. Our Debt Relief Specialists are available by phone at 1-855-884-9243 or you can request a call back via our contact us page. We will find the right debt solution for you, tailored to your financial situation.

Plus, there is no need to travel to our local office. Licensed Insolvency Trustee, Bromwich+Smith, is now offering video appointments, with all services available from the comfort of your home.

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