Can You Do a Consumer Proposal in Ontario If You Have a Mortgage?
Can you do a consumer proposal if you own a home?
Yes. Owning a home does not automatically stop you from filing a consumer proposal in Ontario.
A consumer proposal is usually used to deal with unsecured debt, such as credit cards, personal loans, unsecured lines of credit, and some tax debt.
Your mortgage is different because it is secured against your home.
Is your mortgage included in a consumer proposal?
Usually, no. Your mortgage is a secured debt, which means your home is used as collateral.
That means a consumer proposal does not erase your mortgage, reduce your mortgage balance, or replace your regular mortgage payments.
If you owe $60,000 in credit card and line of credit debt, a consumer proposal may help deal with that unsecured debt. But if you also have a mortgage, you still need to keep paying the mortgage separately.
Can you keep your house during a consumer proposal?
In many cases, yes. If your mortgage payments are up to date and you can afford your mortgage plus the consumer proposal payment, you may be able to keep your home.
However, your home equity may matter. A Licensed Insolvency Trustee may look at how much equity you have when helping structure the proposal.
What if you have equity in your home?
If you have enough equity in your home, you may have another option before filing a consumer proposal: refinancing or debt consolidation.
This means you may be able to use your home equity to pay off high-interest debt and combine it into one payment.
You can estimate this option using the Debt Consolidation Calculator.
If you have $75,000 in high-interest debt and enough home equity, refinancing may help you pay off that debt through your mortgage instead of filing a consumer proposal.
Consumer proposal vs debt consolidation
Here is the simple difference:
- Consumer proposal: reduces unsecured debt but impacts your credit.
- Debt consolidation refinance: uses home equity to pay off debt and may help simplify payments.
The right option depends on your equity, income, credit, debt amount, and mortgage situation.
When might refinancing be worth exploring first?
Refinancing or debt consolidation may be worth exploring if:
- You have enough equity in your home
- Your mortgage payments are current
- Your debts are mostly high-interest debts
- You want to compare options before damaging your credit
When might a consumer proposal make more sense?
A consumer proposal may make more sense if:
- You do not have enough home equity
- You cannot qualify for refinancing
- Your monthly debt payments are no longer manageable
- You need formal creditor protection
Simple summary
Yes, you can do a consumer proposal in Ontario if you have a mortgage. But your mortgage is not usually included, and you must keep making payments if you want to keep your home.
If you have equity in your home, it may be worth checking whether debt consolidation or refinancing could help before choosing a consumer proposal.
Frequently Asked Questions
Does a consumer proposal include your mortgage?
Usually, no. A mortgage is secured debt, so you must continue making your mortgage payments if you want to keep your home.
Can you refinance instead of doing a consumer proposal?
Possibly. If you have enough home equity and can qualify, refinancing may allow you to consolidate high-interest debt.
Can you lose your home in a consumer proposal?
A consumer proposal does not automatically make you lose your home, but missing mortgage payments can still put your home at risk.
Last updated: May 2026