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

If your debts in Manitoba have grown past what your income can carry, you have the same two formal options as anyone else in Canada: a consumer proposal or a bankruptcy, both governed by the federal Bankruptcy and Insolvency Act (BIA). The details around them are set in Manitoba. Provincial 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 debt collectors may contact you. In the 12 months to August 2026, 4,179 Manitobans filed a consumer insolvency, 9.4% more than a year earlier, and about 77% of them chose a consumer proposal.¹

The federal basics, briefly

A consumer proposal is a deal, arranged through a Licensed Insolvency Trustee (LIT), to pay your unsecured creditors part of what you owe over a period of up to five years. You qualify if your debts, leaving out the mortgage on your home, add up to $250,000 or less.²³ You usually keep your property, as long as you stay current on secured debts such as a mortgage or car loan.

In a bankruptcy, the trustee sells whatever the law doesn’t protect. A first bankruptcy normally ends after 9 months, or after 21 months if your income is high enough that you owe surplus income payments.²⁴ Both options require you to attend two financial counselling sessions.³⁴

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

What can you keep in a Manitoba bankruptcy?

The BIA leaves out of a bankrupt’s estate any property that the law of the province where you live protects from seizure.² Manitoba splits that list between two statutes. Personal belongings are covered by section 23 of The Executions Act, and land and homes by section 13 of The Judgments Act.⁵⁶ The dollar figures are written into the Acts themselves, with no regulation adjusting them.⁷

Source: The Executions Act, s. 23(1), and The Judgments Act, s. 13, versions current as of Oct. 14, 2026.⁵⁶

A few points matter in practice:

• The home exemption is very small. A house worth more than the limit can be sold, but only if the price, after costs, beats the exempt amount, and that amount is paid to you first.⁶ Because $2,500 is a sliver of what a home is worth, a homeowner with real equity is generally at risk of losing it in a bankruptcy, which is a main reason many look at a consumer proposal instead.
• The vehicle exemption has a condition. Outside farming, the $3,000 protection applies only when you need the vehicle for work or commuting.⁵
• Over-the-limit items. An item worth more than its cap can be sold, but you get the exempt amount from the proceeds first.⁵
• You can’t sign the protection away. An agreement to give up an exemption under The Executions Act is void.⁵
• Loans still count. The exemptions don’t stop a secured lender from repossessing a financed vehicle or other item if you fall behind.

These limits matter in a consumer proposal too. A trustee will typically compare what your creditors would get from your offer with what they could recover in a bankruptcy, and Manitoba’s low home exemption tends to raise that bar for homeowners. To see the steps in order, Harris & Partners, whose trustees write The Paydown, has a walk-through of the consumer proposal process, from eligibility to filing.

Are RRSPs, pensions and life insurance protected in Manitoba?

RRSPs, RRIFs and RDSPs are protected by federal law. Section 67 of the BIA keeps money in these plans out of the bankruptcy estate, with one exception: contributions made in the 12 months before you file can be claimed by the trustee.²

Pensions get provincial protection. Manitoba’s Pension Benefits Act shields money in or payable from a registered pension plan from seizure, along with money in certain locked-in plans and in certain RRIFs funded only by transfers the Act allows.⁸ The protection gives way for family property division and support enforcement.⁸⁹

Life insurance can be protected too. Under Manitoba’s Insurance Act, while the named beneficiary is the insured person’s spouse, common-law partner, parent, child or grandchild, the policy and its proceeds are exempt from seizure.¹⁰ Check whom your policy names.

RESPs are not on the BIA’s list of protected registered plans, and we found no Manitoba statute that exempts them. If you hold one, ask a trustee how it would be handled before you file.

How much of your pay can be garnished in Manitoba?

A creditor generally needs a court judgment before it can garnish wages. It then serves a garnishing order on your employer. Under The Garnishment Act, 70% of your wages is exempt, and the protected amount can’t fall below $250 a month if you have no dependants or $350 a month if you do.⁹ “Wages” here means pay after deductions your employer makes under provincial or federal law, such as income tax, Canada Pension Plan and employment insurance. The Act allows higher minimums by regulation, but none has been made.⁹⁷

Our own calculations from that rule:

For most working Manitobans, then, up to 30% of take-home pay can be garnished. A wage garnishing order catches pay that comes due for up to one year after it takes effect, unless it is paid off or discontinued first, or you leave the job.⁹

Either side can ask the court clerk to change the exemption, within limits: no higher than 90% of your wages and no lower than the statutory minimum.⁹ Some debts follow different rules. For a support order, only $250 a month is protected, and for a debt owed for room and board, a judge can remove the exemption if it isn’t needed to support you or your family.⁹ Tax debts are also different: the Canada Revenue Agency uses its own federal powers, which our explainer on whether the CRA can garnish your wages covers.

How a filing stops garnishments and collection

Filing a consumer proposal or a bankruptcy triggers a stay of proceedings, a legal pause that stops unsecured creditors from starting or continuing lawsuits, garnishments and other enforcement against you or your property.² For a proposal, the stay runs from filing until the proposal is withdrawn, refused or annulled, or the administrator is discharged; in a bankruptcy, until the trustee is discharged. A bankruptcy also takes priority over garnishments and seizures not yet fully paid out to the creditor.² The OSB tells consumers that wage garnishments and creditor lawsuits stop once either filing is made.³⁴

The stay has limits. It generally doesn’t stop a secured lender, such as a mortgage holder or car lender, from enforcing its security if you fall behind, though a court can delay that in some cases.² Some debts, such as child and spousal support, court-ordered fines and debts arising from fraud, also survive a bankruptcy.⁴ If a creditor keeps calling after you file, give them your trustee’s name and file details.

How long can a creditor sue you in Manitoba?

Manitoba replaced its old limitation rules with The Limitations Act, which came into force on Sept. 30, 2022.¹¹ For most debts, a creditor now has two years from the day it discovered its claim to start a lawsuit. For an unpaid debt, that is often tied to when you defaulted. There is also an outer limit of 15 years from the act or omission the claim is based on, even if the two years haven’t run out.¹¹

The two-year clock can start over:¹¹

1. A written acknowledgment. If, before the deadline, you admit the debt in a signed document given to the creditor, its agent or a trustee, the period begins again from that date. It counts even if you don’t promise to pay.
2. A part payment. Paying part of a debt has the same effect as an acknowledgment.

That is worth knowing before you make a small “good faith” payment on an old account. An expired limitation period doesn’t erase the debt, but it generally stops the creditor winning a judgment, and you must raise it as a defence if sued.

Two exceptions stand out. Once a creditor has a Manitoba court judgment made on or after Oct. 1, 2012, the Act sets no time limit for enforcing it.¹¹ And government claims for taxes, fines or penalties carry no limitation period under the Act.¹¹ The Act also has transition rules for claims that arose before Sept. 30, 2022, so get advice if an older account resurfaces.

What can collection agencies do in Manitoba?

Debt collection in Manitoba falls under Part XII of The Consumer Protection Act. Collection agents must be licensed, and their individual collectors must be registered with the province’s Consumer Protection Office.¹² Most of the conduct rules apply to “any person” collecting a consumer debt, so they cover a creditor chasing its own account as well as an agency.¹² Among them, a collector may not:

• call or visit you to demand or negotiate payment on a Sunday or a holiday, or before 7 a.m. or after 9 p.m. on other days;
• call or visit you, your spouse or common-law partner, or your family so often, or in such a way, that it amounts to harassment, or harass other people while trying to find you;
• threaten action it has no legal right to take, or send documents made to look like court forms;
• call you collect;
• ask you for more than you actually owe, or add the agency’s own fee to your balance;
• give anyone false information that could harm you or your spouse.

Every demand for payment must name the original creditor, the balance and the person making the demand, along with their authority to collect.¹²¹³ If you have a claim against the creditor that offsets the debt, you can say so by registered mail, and further demands must stop until the matter goes to court or you and the creditor agree in writing on what’s owed.¹² A debtor charged an amount the Act doesn’t allow can recover or set off three times that amount.¹²

If you pay a collector, the province suggests getting a signed, dated receipt.¹³ If an agency or creditor breaks these rules, you can raise it with the Manitoba Consumer Protection Office, which administers the Act and takes consumer complaints. It can be reached at 204-945-3800 in Winnipeg or 1-800-782-0067 toll-free within Manitoba.¹³¹⁴

How many Manitobans file, and how the mix has changed

Source: Office of the Superintendent of Bankruptcy.¹¹⁵¹⁶

Over the 12 months to August 2026, Manitoba bankruptcies rose 14.8% and proposals 7.9%. Proposals made up 77.1% of the province’s consumer filings, close to the 78.0% share across Canada.¹ In calendar 2025, the Winnipeg census metropolitan area accounted for 2,410 consumer filings, about 61% of the provincial total.¹⁵

The long record puts those numbers in context. The OSB’s monthly data for Manitoba go back to 1987, and each of the last three calendar years set a new high for the series: 3,623 filings in 2023, 3,781 in 2024 and 3,949 in 2025. Before that, the peak was 3,304, in 2003.¹⁶ The mix has also shifted. Proposals were about 1% of Manitoba consumer filings in 1987, about 45% in 2016 and 78% in 2025, by our calculation from OSB data.¹⁶ Raw counts don’t adjust for population growth, but most Manitobans who file now make a repayment deal rather than go bankrupt. You can follow the monthly numbers in our Canadian insolvency statistics tracker, and our August numbers story has the national picture.

Finding a Licensed Insolvency Trustee in Manitoba

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 is licensed, and find one near you, in the OSB’s directory of Licensed Insolvency Trustees.¹⁷ Many LITs offer a free first consultation to review your debts, income and assets and lay out the options, including ones that don’t involve a formal filing.

It helps to bring a list of what you owe and own, recent pay stubs, your latest tax assessment, and any garnishment or court papers. Ask how Manitoba’s exemptions would apply to your home, vehicle and tools, whether any RRSP contributions fall in the 12-month window, and what a proposal would cost in total compared with a bankruptcy. Harris & Partners also has a Winnipeg office at 201 Portage Avenue, where the first consultation is free.

Frequently asked questions

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

Usually not if it has meaningful equity. Manitoba’s Judgments Act protects only $2,500 of a home owned alone, or $1,500 of each co-owner’s interest.⁶ A consumer proposal generally lets you keep your home as long as you keep up the mortgage, which is why many homeowners consider one.³

Can I keep my car if I file for bankruptcy in Manitoba?

Possibly. One vehicle worth up to $3,000 is protected if you need it for work or to get to work, and farmers can keep a vehicle used on the farm.⁵ If the car is financed, keep up the loan payments, because the lender can still repossess it.

How much of my paycheque can be garnished in Manitoba?

Generally 30%. Seventy per cent of your wages after legally required deductions is protected, and never less than $250 a month, or $350 with dependants.⁹ Filing a consumer proposal or bankruptcy stops a garnishment for an unsecured debt.²

What is the statute of limitations on debt in Manitoba?

For most debts, two years from when the creditor discovered its claim, with a 15-year outer limit. A signed written acknowledgment or a part payment restarts the two years.¹¹

Can a debt collector call me on a Sunday in Manitoba?

No. Collectors can’t call or visit to demand payment on a Sunday or a holiday, or outside 7 a.m. to 9 p.m. on other days.¹² You can complain to the Consumer Protection Office if they do.¹³