Voluntary Filing in Quebec

Voluntary retirement: Is it a good option for you?

Debt Solutions · August 2026 · 7-minute read
From the BRESSE Syndics Team · Licensed Insolvency Trustees · Quebec City and Montreal

Voluntary debt settlement is a well-known solution in Quebec for dealing with debt. It has its merits, but also significant limitations that few people are aware of before committing to it. Before choosing this path, it’s worth understanding exactly what it protects, what it doesn’t protect, and why another solution is often more advantageous.

What is voluntary filing?

Voluntary deposit is a mechanism provided for in the Quebec Code of Civil Procedure. By registering for this program at the registry of the Court of Québec, you agree to regularly remit the attachable portion of your income—generally 30% of your gross salary, after deductions for dependents—to the Court, which then distributes it to your creditors.

The best way to understand voluntary deposit is to think of it as the reverse of a wage garnishment. In a standard wage garnishment, a creditor forces the withholding of a portion of your pay. With a voluntary deposit, you take the initiative to voluntarily set aside that same portion—but on your own terms, before a creditor forces you to do so. It’s a proactive step, which is already good news in itself.

Two key features set it apart. First, you repay 100% of your debts: unlike other solutions, no portion is written off. Second, the interest rate on your registered debts is reduced to the statutory rate of 5%, even if it was much higher in your original contract. It is this reduction in the interest rate that constitutes the main financial benefit of the voluntary settlement.

What Voluntary Disclosure Protects… and What It Does Not Protect

As long as you make your payments, the voluntary deposit protects you against wage garnishment and the seizure of household goods in your home. It also suspends any garnishments already in progress and puts a stop to harassment from registered creditors. So far, so reassuring.

But here’s the crucial caveat that’s too often overlooked: filing for voluntary bankruptcy does not shield you from all actions taken by your creditors. In particular, it does not protect you from claims related to secured debts. A secured creditor—such as a lender or lease provider for your vehicle—retains its rights to the asset: it can still repossess the car. The same applies to other remedies, such as the seizure of your bank account or certain actions affecting your residence. In other words, the protection offered by a voluntary deposit is real, but it is only partial.

⚠ Here’s a fact that surprises a lot of people:
Even if you pay off 100% of your debts plus interest, a voluntary settlement has the same impact on your credit report as a bankruptcy. This means you’ll pay off the entire amount you owe—often over many years—while still facing the most severe credit rating. This is a crucial factor to consider before choosing this path.

Advantages and Disadvantages of Voluntary Filing

To help you understand the situation, here is an honest look at some of the strengths and limitations of this solution.

5 Benefits

1. You pay off all your debts, which may represent a significant personal or professional achievement for some people.
2. The interest rate is reduced to the statutory rate of 5 percent, which is often much lower than the rate in your loan agreements.
3. This is a voluntary and proactive measure that protects you from wage garnishment and the seizure of your household goods.
4. Registration suspends any seizures already in progress and curbs harassment by registered creditors.
5. The procedure is relatively simple to initiate at the clerk’s office of the Court of Quebec.

5 Disadvantages

1. You must repay 100% of your debts: none of them will be forgiven, unlike in a consumer proposal.
2. It can take a very long time—sometimes many years—especially if you have a lot of debt.
3. The protection is partial: secured creditors (such as those for car loans or leases) retain their rights and may repossess the property.
4. It does not provide protection against certain actions, such as bank account garnishment or legal actions involving one’s residence.
5. The impact on your credit report is comparable to that of a bankruptcy, even if you pay everything off.

The consumer’s suggestion: often a better alternative

Given these limitations, it is worth comparing voluntary filing to a consumer proposal—a solution governed by the Bankruptcy and Insolvency Act and filed by a licensed insolvency trustee. In many cases, it yields better results—without necessarily entailing worse consequences.

The difference in cost is striking. While voluntary settlement requires you to repay 100% of your debts, a consumer proposal allows you to repay only a fraction of what you owe, based on your actual ability to pay, over a maximum of 60 months. And interest isn’t just reduced to 5%—it’s frozen at 0%. So you pay less, and over a fixed period rather than a potentially endless one.

Above all, the protection is much broader. Filing a proposal triggers a suspension of all proceedings: not only wage garnishments, but also legal actions and, in many cases, steps that a voluntary filing cannot stop—such as those related to unpaid rent or the repossession of a leased or financed vehicle. Whereas voluntary filing leaves the door open to secured creditors, the proposal allows your trustee to put the entire situation on hold and negotiate it as a whole.

As for the impact on credit, it is no worse than that of voluntary filing—in fact, it is often considered less severe, since the proposal reflects a negotiated settlement rather than a measure equivalent to bankruptcy. Less expensive, better protection, and a fixed term: that’s why, for many people, the consumer proposal is the option to consider first.

💡 In summary
Voluntary debt settlement: You repay 100% of your debts at 5% interest, with protection against wage garnishment but NOT against secured creditors (car loans, etc.), and the impact on your credit is equivalent to that of a bankruptcy. Consumer proposal: You repay a portion of your debts at 0% interest, over a maximum of 60 months, with ALL proceedings suspended—often at a lower cost and without more severe consequences.

Pros and Cons of the Consumer Proposal

To be fair, here are some of the strengths and limitations of this solution—because no option is perfect for everyone.

5 Benefits

1. You pay back only a portion of your debts, based on your ability to pay, rather than the full amount, at 0% interest.
2. The stay suspends all proceedings, including, in many cases, those related to unpaid rent or the repossession of a leased or financed vehicle.
3. You generally keep your possessions, including your house and car.
4. The property manager’s fees are included in the monthly payment, with no additional charges.
5. The impact on credit is no worse than that of a voluntary deposit, and is often considered less severe.

5 Disadvantages

1. The loan appears on your credit report and remains there for a certain period of time after you’ve finished making payments.
2. It applies to unsecured debts: to keep a financed asset, you generally must continue to make the payments on it.
3. It must be accepted by your creditors (which is the case in the vast majority of cases).
4. It is intended for individuals whose unsecured debts do not exceed the statutory limit.
5. Failure to make payments may result in the cancellation of the proposal.

A concrete example

Take Martin, a 41-year-old from the Montreal area. He owes $38,000 to various creditors, including a balance of $14,000 on a car loan. Facing the threat of a wage garnishment, he is considering filing for voluntary bankruptcy. On paper, the idea reassures him: he would pay off the entire amount at 5% interest.

But when analyzing his situation during an initial free consultation, his trustee raised a point that Martin wasn’t aware of: filing for voluntary bankruptcy wouldn’t prevent his auto lender from repossessing the vehicle he needs for work, since it’s a secured debt. Furthermore, paying off the entire $38,000 would take years, with a credit score as low as it would be in the event of bankruptcy.

With a consumer proposal, Martin could instead settle his unsecured debts for a fraction of the amount, at 0% interest, while resolving the issue with his vehicle and suspending all legal proceedings. The result: lower total costs, better protection, and a defined timeframe.

Note: Every situation is unique: voluntary repayment may be suitable for some people, while a settlement offer may be preferable for others. That is precisely what an initial meeting is intended to determine, based on the numbers.

How can you figure out what’s best for you?

There is no one-size-fits-all answer: the best solution depends on your debts, your assets, your income, and your goals. The only way to make a confident decision is to get a clear and comprehensive picture of your situation from a professional who isn’t trying to sell you anything.

At BRESSE, from your very first appointment, you’ll meet with an experienced bankruptcy trustee who will honestly explain all your options—voluntary filing, consumer proposal, personal bankruptcy, debt consolidation, or other alternatives—and which one is truly in your best interest.

💡 Good to Know
The first consultation is free, confidential, and with no obligation—in person at our offices in Quebec City or Montreal, by phone, or via video conference, anywhere in Quebec. An appointment is usually available within 24 hours.

This article provides general information and does not constitute legal advice. The protections and consequences described depend on your specific situation; consult a licensed insolvency trustee for an assessment tailored to your case.

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