December is a month of reflection you look back at the year, assess what worked, and take a hard look at what didn’t. For many Canadians facing overwhelming debt, it’s also the time when difficult financial questions rise to the surface… including whether it’s finally time to file for bankruptcy or consider a consumer proposal.

If you’ve been wrestling with this decision, here’s what you need to know about filing in December including the real pros, the potential drawbacks, and how to choose the right path for your financial reset.

Why People Consider Filing in December

December naturally brings financial pressure: holiday expenses, year-end bills, and a clearer view of your annual income and debt load.
It’s also a moment where many people say, “I don’t want to carry this stress into next year.”

Two common options come into focus:

1. Consumer Proposal

A legally binding agreement to pay back a portion of your debt, with:

• No interest
• Lower monthly payments
• Protection from creditors
• You keep your assets

2. Bankruptcy

A faster, more drastic solution that:

• Eliminates unsecured debts
• Requires monthly income reporting
• Has potential impact on tax refunds and assets
• Comes with a 9–21 month timeline depending on income

December is a strategic month for both, but for different reasons.

The Pros of Filing in December

⭐ Start the New Year with a Clean Slate

Filing before December 31 means you head into January without collection calls, wage garnishments, or mounting interest. The earlier you file, the sooner financial recovery begins.

⭐ Stop Holiday Debt from Spiralling

If you’re already struggling, December spending can worsen things. Filing now prevents adding more debt that you’ll only have to deal with later.

⭐ Your Bankruptcy Tax Year Ends Sooner

For bankruptcy filers, your “bankruptcy year” ends on December 31, even if you filed late in the month.  This means your Trustee will only keep your refunds for this year and earlier.  Depending on timing and your situation, a December filing may help protect future refunds or GST credits.

The Cons of Filing in December

⚠️ Holiday Spending Will Be Reviewed

Large purchases or credit use right before filing may be flagged. Trustees will need to assess whether holiday spending was reasonable or excessive.

⚠️ Year-End Income Can Affect Surplus Income

In bankruptcy, surplus income rules factor in your average earnings.
If you had:

• Bonuses
• Overtime
• Seasonal income
  …your monthly average could increase your payment requirements.

⚠️ It Can Feel Emotionally Heavy

Filing during the holidays can feel overwhelming. Some people prefer to start in January to separate the decision from year-end stress.

Should You Choose a Consumer Proposal Instead?

If you’re earning stable income and want to keep your assets — especially your home, car, or tax refunds  a consumer proposal may be the better December option.

It allows you to:

• Lock in a predictable monthly payment
• Avoid bankruptcy altogether
• Protect assets
• Start fresh without the same emotional weight

Many Canadians choose to file their proposal in December so they can begin the new year with a structured, manageable plan.

So… Should You File in December?

December can be an appropriate time to take action. However, every individual’s situation is unique, and the right approach depends on your income, assets, household needs, and long-term financial goals.

The most effective first step is to consult with a Licensed Insolvency Trustee (LIT) who can provide a thorough assessment and clear professional guidance. Andrea Orr, LIT, has been helping Canadians eliminate their debt since 1999. As a long-time Windsor resident, she has supported thousands of individuals and families in regaining control of their finances and rebuilding their financial stability.

A financial reset should never feel rushed. It should be informed, thoughtful, and aligned with the future you want to create.