Priority vs Non-Priority Debts
| Priority Level | Debt Type | Consequence of Non-Payment |
|---|---|---|
| Critical | Rent / mortgage | Eviction / foreclosure |
| Critical | Utilities (heat/electricity) | Disconnection |
| Critical | Child support / alimony | Wage garnishment, jail |
| Critical | CRA tax debt | Wage garnishment, asset seizure (no court needed) |
| Critical | Court fines | Arrest warrant |
| High | Secured car loan | Vehicle repossession |
| High | Condo fees | Lien on property, legal action |
| High | Insurance premiums | Loss of coverage |
| Medium | Student loans | Wage garnishment, CRA intercept |
| Lower | Credit cards | Credit score damage, collections |
| Lower | Personal loans (unsecured) | Credit score damage, collections |
| Lower | Lines of credit (unsecured) | Credit score damage, collections |
| Lower | Medical debt | Collections (no direct legal power) |
| Lower | Buy now pay later | Collections, credit impact |
Understanding Consequences
Critical Priority: Shelter
| Debt | If You Don’t Pay | Timeline |
|---|---|---|
| Rent | Eviction process begins | Varies by province (14-60 days notice) |
| Mortgage | Foreclosure / power of sale | After 3-6 months typically |
| Property tax | Lien on home, eventually tax sale | 2-3 years of arrears |
Critical Priority: Utilities
| Utility | Disconnection Rules | Winter Protection |
|---|---|---|
| Electricity | Notice required, then disconnect | Some provinces ban winter shutoffs |
| Natural gas | Notice required, then disconnect | Ontario: Nov 15 - Apr 30 protection |
| Water | Rarely disconnected (essential service) | Most jurisdictions don’t disconnect |
| Internet/phone | Can be disconnected | No seasonal protection |
Critical Priority: Government
| Debt | CRA/Government Powers |
|---|---|
| Income tax owed | Garnish wages (up to 50%), seize bank accounts, lien on property, intercept tax refunds |
| GST/HST owed | Same as income tax |
| Child support arrears | Garnish wages, suspend passport, suspend driver’s licence, jail (contempt of court) |
| Court fines | Arrest warrant, driver’s licence suspension |
| Student loans (government) | CRA can intercept tax refunds, garnish wages |
High Priority: Secured Debts
| Debt | What the Creditor Can Do |
|---|---|
| Car loan | Repossess vehicle |
| Secured line of credit | Seize collateral |
| Condo fees | Register lien, force sale |
| Equipment financing | Seize equipment |
Lower Priority: Unsecured Debts
| Debt | What the Creditor Can Do |
|---|---|
| Credit cards | Report to bureau, send to collections, sue (then garnish) |
| Personal loans | Same as credit cards |
| Lines of credit (unsecured) | Same as credit cards |
| Medical bills | Send to collections |
| Buy now pay later | Report to bureau, collections |
Key difference: Unsecured creditors must sue you and win a court judgment before they can garnish wages or seize assets. This takes months or years.
How to Triage When You Can’t Pay Everything
Step 1: Calculate Your Essentials Budget
| Category | Monthly Amount |
|---|---|
| Rent / mortgage | $ |
| Utilities | $ |
| Food | $ |
| Essential transportation | $ |
| Child support | $ |
| Medications | $ |
| Total essentials | $ |
Step 2: Apply the Priority Framework
| Order | Action |
|---|---|
| 1 | Pay housing costs (rent/mortgage) |
| 2 | Pay utilities (especially heat in winter) |
| 3 | Pay child support in full |
| 4 | Buy essential food and medication |
| 5 | Contact CRA to arrange tax payment plan |
| 6 | Make secured debt payments (car loan) |
| 7 | Pay minimum on unsecured debts if anything remains |
| 8 | Seek free help if you can’t cover priorities |
Step 3: Contact Creditors Before Missing Payments
| Creditor Type | What to Ask For |
|---|---|
| Landlord | Payment plan for arrears, reduced rent temporarily |
| Mortgage lender | Payment deferral, extended amortization |
| Utility company | Budget billing, payment arrangement, low-income programs |
| CRA | Payment arrangement (they almost always agree) |
| Bank / credit card | Hardship program, reduced interest, payment deferral |
Province-Specific Rules
Eviction Timelines
| Province | Notice Period (Non-Payment) | Process |
|---|---|---|
| Ontario | 14 days (N4 form) | Then Landlord & Tenant Board hearing |
| BC | 10 days | Then Residential Tenancy Branch |
| Alberta | 14 days | Then court application |
| Quebec | 20 days | Then Régie du logement |
| Manitoba | 14 days | Then Residential Tenancies Branch |
| Nova Scotia | 15 days | Then Residential Tenancies |
Winter Utility Disconnection Rules
| Province | Winter Protection |
|---|---|
| Ontario | Cannot disconnect electricity Nov 15 - Apr 30 for residential |
| Quebec | Cannot disconnect electricity for low-income Oct 1 - Mar 31 |
| Manitoba | Cannot disconnect gas heating Nov 1 - Apr 30 |
| BC | No specific winter disconnection ban |
| Alberta | No specific winter disconnection ban |
When to Seek Professional Help
| Situation | Recommended Help |
|---|---|
| Behind on priority debts | Contact creditors immediately, call 211 for local help |
| Multiple missed payments | Free credit counselling |
| Debt exceeds annual income | Licensed Insolvency Trustee consultation (free) |
| Facing eviction | Legal aid, tenant rights organization |
| CRA garnishing wages | Tax lawyer or LIT |
| Feeling overwhelmed | Credit counsellor + mental health support |