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Glossary of Debt Terms

When it comes to resolving your personal debt, it can be easy to get lost in the process. After all, there is a lot of financial terminology in play that you likely haven’t heard before.

To help make the process easier, we’ve assembled a glossary of common terms that may be useful for you:

Absolute Discharge

An Absolute Discharge is a ruling by a court in a Bankruptcy case, removing your legal responsibility to pay your debts. This is not necessary when you receive an Automatic Discharge.


As relating to Bankruptcy, it refers to the property of the debtor which is available for disbursement to creditors (for paying debts).

Automatic Discharge

An Automatic Discharge is a term used to refer to the successful completion of a Bankruptcy period. This requires the fulfillment of mandatory counselling requirements, payment of both regular and surplus fees, and the passage of a pre-determined period of time.


A term used to describe an individual or business who has filed for Bankruptcy. Also used as a verb to describe the action of being forced into Bankruptcy.


For a detailed definition, see our Bankruptcy page.

Bankruptcy and Insolvency Act

The Bankruptcy and Insolvency Act is a federal law that governs Bankruptcy and insolvency, created to protect citizens from inescapable debt.

Bankruptcy Trustee

Also known as a Licensed Insolvency Trustee, a Bankruptcy Trustee is an individual who is licensed to administer both Bankruptcies and Consumer Proposals.


Any commercial or industrial enterprise. This includes everything from small businesses run out of your home to multinational corporations.


The Canadian Association of Insolvency and Restructuring Professionals. This is the professional association that provides training and certification to all Canadian Licensed Insolvency Trustees (i.e. Bankruptcy Trustees).

Certificate of Full Performance of Proposal

A document issued by the Proposal Administrator (Licensed Insolvency Trustee) stating that the terms of your Consumer Proposal have been successfully completed. This means that your debts no longer exist.


A Chartered Insolvency and Restructuring Professional, as designated by the Canadian Association of Insolvency and Restructuring Professionals. This is the professional designation for all of our Trustees.

Conditional Discharge

A ruling issued by the court that releases a Bankrupt individual from their debts, but only if certain conditions are met.

Consumer Proposal

For a detailed definition, see our Consumer Proposals page.

Credit Counselling

A free service provided by Fuller Landau to assess your current financial situation, explore your options for resolving debt, and develop strategies for effective budgeting and financial management.


An individual or business who lent money to a debtor and has yet to be paid back. Creditors can be either secured or unsecured.


Any money owed to an individual or business.


An individual who carries debt.

Discharge from Bankruptcy

Any release from the legal requirements to repay debts due to Bankruptcy. There are five types of discharge: automatic, absolute, conditional, suspended, and refused.

Exempt Asset

Property belonging to the debtor that is not available for disbursement to creditors, as defined by provincial legislation.


An action authorized by the courts that requires a third party to turn over a debtor’s property (most often bank accounts and wages) directly to a creditor. These actions are suspended by Bankruptcy or Consumer Proposal.


In the context of personal finances, this is the inability to pay debts as they become due.

Insolvent Debtor

Any individual or business who is unable to pay their debts.

Licensed Insolvency Trustee

Also known as a Bankruptcy Trustee, a Licensed Insolvency Trustee is an individual who is licensed to administer both Bankruptcies and Consumer Proposals.

Notice of Intention to File a Proposal

A legal document filed by a Trustee to the Superintendent of Bankruptcy notifying them that the debtor intends to file either a Consumer Proposal, or file for Bankruptcy.

Ontario Execution Act

The provincial legislation that stipulates which assets you are allowed to keep in the case of a Bankruptcy. For more information, see our What Happens To My Assets page.


An offer presented to creditors that would change the terms of repayment, usually to avoid Bankruptcy.

Secured Creditor/Debt

If a loan is made with property promised as security (such as a mortgage, which uses the house as security), it is considered ‘secured’. If a debtor cannot repay a secured loan, the secured creditor can claim the property itself as repayment.

Statement of Affairs

A financial statement, or a balance sheet showing the value of assets and liabilities, of an individual filing for Bankruptcy, along with the details of all the related creditors.


The ability to pay debts as they become due.

Superintendent of Bankruptcy

The federal office responsible for overseeing any transactions made under the Bankruptcy and Insolvency Act.

Surplus Income

The amount of income that some Bankrupt individuals must pay during a Bankruptcy, if their income exceeds set limits, as determined by the Office of the Superintendent of Bankruptcy.

Suspended Discharge

A Suspended Discharge is a ruling wherein the Bankrupt individual is released from debt, but not until after a set period of time has passed.

Trustee in Bankruptcy

An individual who is licensed to administer both Bankruptcies and Consumer Proposals, also known as a Bankruptcy Trustee or a Licensed Insolvency Trustee.

Unsecured Creditor/Debt

If a loan is made without property promised as security (such as a standard credit card), it is considered ‘unsecured’. Unsecured creditors may still take legal action to claim assets through garnishment.


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It’s time to get a fresh start. If you’re struggling with debt, call us today.


Consumer Proposal vs Bankruptcy

Can You Relate?

When it comes to debt, particularly high-interest debt from credit cards, a few missed payments can often become a slippery slope towards out-of-control debt.

Minimum payments barely cover the interest. If those minimum payments are missed, or if you need to go further into debt to pay them, it’s time to get help.

Nobody likes dealing with constant harassing phone calls or late payment notices. if you can’t afford to pay off all your debts, they won’t stop until you take action.

Often, wage garnishments from a creditor just compound the problem, and make it even more difficult to pay off your other debts.

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It’s time to take back control of your life.
Call us today at (416) 927-7200 or fill the in the form below and book your free consultation.