Debt help in Alberta: consumer proposals, bankruptcy and the rules that differ here

Albertans who can no longer keep up with their debts have the same two formal options as everyone else in Canada: a consumer proposal or a bankruptcy, both under the federal Bankruptcy and Insolvency Act (BIA). What changes at the provincial border is the detail around them. Alberta law decides which belongings you keep in a bankruptcy, how much of your pay a creditor can garnish, how long a lender has to sue, and how a collection agency may contact you. In the 12 months to August 2026, 18,947 Albertans filed a consumer insolvency, and roughly 85% of them chose a proposal.¹

The federal basics, briefly

A consumer proposal is an arrangement, made through a Licensed Insolvency Trustee (LIT), to repay your unsecured creditors part of what you owe over no more than five years. It’s open to individuals whose debts total $250,000 or less, not counting the mortgage on their home.² You generally keep your assets, provided you stay current with secured payments such as your mortgage or car loan.³

In a bankruptcy, the trustee sells property that the law doesn’t protect. A first bankruptcy usually ends after 9 months, or 21 months if your income is high enough that you owe surplus income payments.⁴

Those rules are the same in Lethbridge as in Halifax. For the full picture, read our guides to how a consumer proposal works in Canada and what happens in a Canadian bankruptcy.

What can you keep in an Alberta bankruptcy?

The BIA leaves out of a bankrupt’s estate any property that provincial law shields from seizure in the province where the person lives.² In Alberta, that list sits in section 88 of the Civil Enforcement Act, and the dollar caps are set by section 37 of the Civil Enforcement Regulation.⁵⁶ The amounts below come from the Alberta King’s Printer consolidation of the regulation, current as of April 30, 2025.

Source: Civil Enforcement Act, s. 88; Civil Enforcement Regulation, s. 37.⁵⁶

The exemption covers your interest in the property, which in practice means roughly what it’s worth after any loan secured against it. If several items of one kind together exceed the cap, you can choose which to keep. Money from selling an exempt item stays protected for 60 days if you keep it separate.⁵⁶

These caps are fixed dollar figures, not indexed amounts. The regulation’s history notes show section 37 was last amended in 2005, so the limits have stood still through two decades of rising house and vehicle prices.⁶ In a consumer proposal, a trustee will typically compare what your creditors would receive under your offer with what they might recover in a bankruptcy, and Alberta’s limits feed into that comparison. Harris & Partners, whose trustees write The Paydown, has a page on consumer proposals and debt relief in Alberta.

Are RRSPs and RESPs protected in Alberta?

Retirement savings get federal protection in a bankruptcy. The BIA excludes property in an RRSP, a RRIF or an RDSP from what the trustee can take, except for contributions made in the 12 months before the bankruptcy.²

Outside bankruptcy, Alberta’s Civil Enforcement Act shields money inside an RRSP, a RRIF or a deferred profit sharing plan from judgment creditors, though a payment from the plan to you loses that protection. RDSPs are protected, payments included, and so are RESP savings and education payments to a beneficiary.⁵ How the federal 12-month rule and Alberta’s statute fit together for a recent RRSP deposit is a good question to put to a trustee before you file.

How does wage garnishment work in Alberta?

A creditor that wins a judgment can have a garnishee summons served on your employer. Alberta doesn’t use a flat percentage. Each month, a minimum amount of your net pay is protected, plus half of whatever you earn above that minimum, up to a ceiling.⁵ Net pay means earnings after income tax, Canada Pension Plan and employment insurance deductions.⁶

The regulation sets the minimum at $800 a month plus $200 for each dependant, and the maximum at $2,400 a month plus $200 for each dependant.⁶ Dependants include a spouse or adult interdependent partner and children under 18 who live with you. Our own calculations from the rule:

On application, a court can raise or lower the minimum or maximum, taking into account your family responsibilities, your personal circumstances and your dependants’ own earnings.⁶ The same formula applies when a creditor garnishes regular payments from a registered plan such as a RRIF. Judgment creditors can also garnish bank accounts. Garnishment for child or spousal support follows separate exemptions under Alberta’s maintenance enforcement law.⁵⁶

How a filing stops garnishments and collection

Filing a consumer proposal or a bankruptcy triggers a stay of proceedings, a legal freeze that bars unsecured creditors from starting or continuing lawsuits, garnishments and other collection action against you.² For a proposal, the stay takes effect when the proposal is filed. It lasts until the proposal is withdrawn, refused or annulled, or until the trustee administering it is discharged. A bankruptcy also takes priority over garnishments and seizures that haven’t yet been fully paid out to the creditor.² The OSB tells consumers that wage garnishments and creditor lawsuits stop once either one is filed.³⁴

The stay has limits. It generally doesn’t prevent a secured lender, such as a mortgage holder or car lender, from enforcing its security if you fall behind. Some debts also survive a bankruptcy, including support payments and court-ordered fines.²⁴

How long can a creditor sue you in Alberta?

Under Alberta’s Limitations Act, a creditor generally has two years from the date it first knew, or should have known, that it had a claim worth suing over. There’s also an outer limit of 10 years from the date the claim arose, and whichever deadline comes first applies.⁷ When the two-year clock starts depends on the facts, so get advice if a creditor revives an old account.

Two cautions. A part payment, or a signed written admission that the money is owed, made before the deadline starts the limitation period over again.⁷ And the deadline is a defence, not a cancellation: the debt doesn’t vanish, and you must raise the limitation period yourself if you are sued. Once a creditor has a court judgment, a claim based on that judgment has its own 10-year limit.⁷

What can collection agencies do in Alberta?

Collection agencies and their collectors need a provincial licence. The conduct rules sit in a regulation under Alberta’s Consumer Protection Act, the Collection and Debt Repayment Practices Regulation.⁸⁹ Among them:

• Calls and visits only between 7 a.m. and 10 p.m. Alberta time.
• No more than three unsolicited contacts for the same creditor in any seven days (mail doesn’t count).
• No threats, profanity or intimidation, and no misleading references to police, court action or garnishment.
• An agency may contact your employer only to confirm your employment, job title and work address, in preparation for legal action.
• Relatives, friends and neighbours may be contacted only to find your address or phone number, not to discuss your debt.
• If you tell the agency in a verifiable way, such as by email, that you dispute the debt and want the creditor to go to court, contact must stop.
• An agency can’t pursue a debt that isn’t backed by a judgment if your last payment or written acknowledgment was more than six years ago.
• Agencies can’t set up wage assignments with you or your employer.

The province’s consumer page is plain on one point: the police don’t get involved in collecting debts. These rules cover collection agencies, not the original lender collecting its own account.⁹ If an agency breaks them, you can file a complaint with Service Alberta’s Consumer Investigations Unit.¹⁰

How many Albertans file, and what the long view shows

In calendar 2025, Albertans filed 18,876 consumer insolvencies, 0.6% fewer than in 2024. The OSB listed Alberta among the provinces with the largest declines. Of those filings, 16,261 were proposals and 2,615 were bankruptcies. The Edmonton area accounted for 5,884 and the Calgary area for 4,929.¹¹ On the business side, Alberta was the only province where business insolvencies rose in 2025, up 18.6%.¹¹

In the 12 months to August 2026, consumer bankruptcies in Alberta rose 16.6% to 2,919 while proposals fell 3.2% to 16,028.¹ Even so, about 85% of Alberta’s consumer filings were proposals, well above the national share of 78.0%. Our August numbers story has the national picture.

The longer record shows how closely filings here follow the energy economy. Oil prices fell steeply from mid-2014. The federal energy regulator recorded a 48% drop in the price of West Texas Intermediate crude in 2015 compared with 2014, and it linked weaker fuel demand in the province to the effect of the price drop on Alberta’s economy.¹² Over the same stretch, Alberta consumer insolvencies climbed from 8,281 in 2014 to 9,810 in 2015 and 13,170 in 2016, an increase of about 59% in two years.¹³¹⁴

The mix has changed just as much. In 2016, proposals made up about 59% of Alberta’s consumer filings. By 2025 they were 86%.¹⁴¹¹ Raw counts don’t adjust for population growth, but the direction is clear: most Albertans who file today negotiate a repayment deal and keep their assets rather than go bankrupt.

Finding a Licensed Insolvency Trustee in Alberta

Consumer proposals and bankruptcies are administered by Licensed Insolvency Trustees, who are licensed and supervised by the federal Office of the Superintendent of Bankruptcy. You can confirm that a trustee holds a licence, and find one near you, in the OSB’s directory of Licensed Insolvency Trustees. Many LITs offer a free first consultation.

Bring a list of what you own and owe, recent pay stubs, and any garnishment or court papers. Ask how Alberta’s exemptions apply to your home, vehicle and tools, and whether a proposal or a bankruptcy would cost less in total. Harris & Partners also has an office in downtown Calgary.

Frequently asked questions

Can I keep my house if I go bankrupt in Alberta?

Alberta protects up to $40,000 of equity in your principal residence, or a proportionate share if you co-own it.⁶ Equity above that is available to creditors, which is one reason homeowners often look at a consumer proposal instead.

Can I keep my car in an Alberta bankruptcy?

One vehicle is protected up to $5,000 of equity.⁶ If you have a car loan, keep up the payments: a secured lender can still repossess.

How much of my paycheque can be garnished in Alberta?

At least $800 of monthly net pay plus $200 per dependant is protected, plus half of anything above that, up to $2,400 plus $200 per dependant.⁶ Filing a proposal or bankruptcy stops the garnishment.

Is there a limitation period on debt in Alberta?

Yes. Most debt lawsuits must start within two years of when the creditor knew or should have known of its claim, with a 10-year outer limit.⁷

Can a collection agency call me at work in Alberta?

Yes, unless you ask it not to and then keep to other arrangements for discussing the debt.⁸⁹