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

If you live in Nova Scotia and your debts have outgrown your income, your two formal options are the same as anywhere 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. Nova Scotia law decides which belongings you keep in a bankruptcy, how much of your pay a creditor can garnish, how long a creditor has to sue, and how collection agencies must behave.

This guide covers those Nova Scotia rules. For the full mechanics of each federal option, see our national guides to how a consumer proposal works and what happens in a bankruptcy.

Consumer proposal and bankruptcy: the federal basics

Both options are run by a Licensed Insolvency Trustee, a professional licensed and supervised by the federal Office of the Superintendent of Bankruptcy (OSB).

• Consumer proposal. You offer your unsecured creditors a deal to repay part of what you owe, over up to five years. It is open to individuals whose debts, not counting the mortgage on their home, are $250,000 or less. You generally keep your property.¹
• Bankruptcy. Your non-exempt assets are sold for your creditors, and you may have to pay part of your income above a set standard. A first bankruptcy usually ends after 9 months, or 21 months if you owe surplus income payments.²

Both require two financial counselling sessions, both affect your credit, and both stop most collection activity the day they are filed. The provincial rules below decide a lot about which option fits.

How many Nova Scotians file for insolvency?

A little over 4,300 Nova Scotians a year file a consumer insolvency, and most choose a proposal.

Source: Office of the Superintendent of Bankruptcy.³⁴

Filings over the 12 months to August were up 1.2% on the year before. Over that same period, proposals made up about 74% of Nova Scotia consumer filings, a little below the national share of 78.4% in 2025. The Halifax area accounted for 1,715 consumer filings in 2025, up 4.1% from 2024.⁴ For the latest national numbers, see our August insolvency data story.

What can you keep in a Nova Scotia bankruptcy?

The BIA protects any property that provincial law shields from seizure, so Nova Scotia’s list sets much of what you keep.⁵ That list is in section 45 of the province’s Judicature Act, with dollar limits set by regulation.⁶⁷

Dollar limits as of the regulation in force since Oct. 1, 2019 (N.S. Reg. 162/2019).⁷

Several things on that list need a closer look:

• “Reasonably necessary” is a judgment call. The Act uses that phrase rather than a number for clothing and furniture, which it protects when “reasonably necessary for the debtor and his family.”⁶ Your trustee assesses what qualifies.
• Financed items are different. The exemptions don’t override a lender’s security. If your car or furniture secures a loan, the lender can still repossess it if you stop paying.⁶ Separately, Nova Scotia’s Personal Property Security Act sets its own limits, $5,000 of furniture and appliances and $6,500 for a vehicle needed for work, on what a secured lender can seize on default, but those limits don’t apply to a lender that financed the purchase of the item itself.⁸
• There is no home exemption. Section 45 doesn’t list a house, so equity in a home is generally not protected in a Nova Scotia bankruptcy. That is one reason a homeowner with equity may look at a proposal instead.

RRSPs and pensions

Retirement savings are protected mainly by federal law. Under section 67 of the BIA, money in an RRSP, RRIF or RDSP is exempt in a bankruptcy, except contributions made in the 12 months before you file.⁵ Nova Scotia’s Pension Benefits Act separately shields money payable under a pension plan, and locked-in money transferred out of one, from seizure.⁹

Harris & Partners also keeps a province-by-province summary of bankruptcy exemptions if you want to compare Nova Scotia with elsewhere.

How much of your pay can be garnished in Nova Scotia?

Before a creditor such as a bank or credit card company can garnish wages, it usually needs a court judgment. It then enforces the judgment with an execution order, which your employer receives. Nova Scotia’s Civil Procedure Rules set the limit.¹⁰

• The sheriff can collect 15% of your gross wages. The other 85% is exempt.
• No deduction can push your net pay below $450 a week if you support a dependant, or $330 a week otherwise.
• A judge can order a different amount.
• Your bank can’t hand the sheriff money it knows came from the exempt part of your wages, or from income such as income assistance or Canada Pension Plan payments that legislation protects.

Those figures are as of the official consolidation of the Rules to June 19, 2026.¹⁰ Support orders and debts owed to government can follow other rules, so check with a trustee if one of those is garnishing you.

How a filing stops garnishments and collection

Filing a consumer proposal or a bankruptcy triggers a stay of proceedings: a legal freeze that stops unsecured creditors from suing you, continuing a lawsuit or enforcing a judgment against you or your property.¹¹¹² In practice, that means a wage garnishment for an unsecured debt ends and collection calls should stop.

The stay has limits. It usually doesn’t stop a secured lender, such as a mortgage or car lender, from enforcing its security, or the collection of child or spousal support. A creditor can also ask the court to lift it in some situations.¹³ If a creditor keeps calling after you file, tell them about your filing and refer them to your trustee.

How long can a creditor sue you in Nova Scotia?

Under Nova Scotia’s Limitation of Actions Act, most claims, including most consumer debts, must be brought within two years of the day the creditor discovered the claim, and never more than 15 years after the act or omission it is based on.¹⁴ For an unpaid debt, the clock generally starts around the time you default.

Two things restart the two-year period:¹⁴

1. A written acknowledgment of the debt, signed by you or your agent, given to the creditor or its agent before the period runs out.
2. A part payment of the amount owed.

That matters if an old account resurfaces. A small “good faith” payment can give a creditor a fresh two years to sue. Once the period has expired, the creditor generally can’t win a court judgment for the debt, although the debt is not erased.

Government claims are treated differently. The general period doesn’t apply to provincial claims for fines, taxes or penalties, provincial student loans, or money owed under social, health or economic programs.¹⁴ Federal debts, such as income tax, follow federal law.

Debt collectors’ rules in Nova Scotia

Collection agencies must be licensed under Nova Scotia’s Collection and Debt Management Agencies Act, and businesses that chase their own unpaid accounts face similar limits under the Consumer Creditors’ Conduct Act.¹⁵¹⁶¹⁷ Among other things, a collector:

• can’t contact you on a Sunday or a statutory holiday such as Natal Day or Nova Scotia Heritage Day, or outside 8 a.m. to 9 p.m. on other days, unless you asked them to call;¹⁶¹⁸
• can’t contact you on any day in a seven-day stretch in which it has already contacted you three times for the same creditor;¹⁶
• must send written notice at least five days before its first phone call;¹⁶
• can’t threaten or harass you, or mislead anyone about police, court action, liens or garnishment;¹⁶
• can’t discuss your debt with your family, friends or employer except in narrow cases, such as confirming your job once or reaching someone who guaranteed the debt.¹⁶

You can tell an agency in writing to deal only with your lawyer. You can also dispute a debt by registered mail to both the creditor and the agency, and ask for the dispute to be settled in court.¹⁶ Complaints go to the province’s Service Nova Scotia and Internal Services department.¹⁵

Finding a Licensed Insolvency Trustee in Nova Scotia

Consumer proposals and bankruptcies are filed through a Licensed Insolvency Trustee. You can look up any active trustee in the OSB’s Licensed Insolvency Trustee directory, which you can search by location.¹⁹ Many trustees offer a free first consultation, where they review your debts, income and assets and set out the options, including ones that don’t involve a formal filing.

The Paydown is published by Licensed Insolvency Trustees at Harris & Partners Inc. If you’d like to meet someone in person, Harris & Partners’ Dartmouth office on Wyse Road offers a free initial consultation. If a job loss is behind your debts, our look at September’s jobs numbers covers what to do about debts when income falls.

Frequently asked questions

Can I keep my car if I go bankrupt in Nova Scotia?

Often, if it’s modest. Nova Scotia protects one motor vehicle worth up to $6,500.⁷ If the car is financed, the exemption doesn’t stop the lender from repossessing it if payments stop, so keeping a financed car generally means keeping up the loan payments. A trustee can tell you how your car’s value and loan balance would be treated.

Can I lose my house in a Nova Scotia bankruptcy?

Possibly. Nova Scotia’s exemption list doesn’t include a home, so equity in it is generally available to creditors in a bankruptcy.⁶ A consumer proposal generally lets you keep your property as long as you keep up your mortgage payments, which is one reason a homeowner with equity may consider one.¹

How much of my paycheque can be garnished in Nova Scotia?

Generally 15% of your gross wages, as long as your net pay stays above $330 a week, or $450 if you support a dependant.¹⁰ Filing a consumer proposal or bankruptcy stops a garnishment for an unsecured debt.¹

Is there a statute of limitations on debt in Nova Scotia?

Yes. For most debts, a creditor has two years from discovering its claim to sue, with an outer limit of 15 years. A signed acknowledgment or a part payment restarts the two years.¹⁴

Is a consumer proposal different in Nova Scotia?

The proposal itself is federal, so the rules on eligibility, the five-year maximum and creditor voting are the same across Canada. What differs is the backdrop: Nova Scotia’s exemptions shape what creditors would receive in a bankruptcy, and creditors typically weigh a proposal against that when they decide how to vote.