Business Debt Solutions in Ontario

There are four legal routes out of business debt in Ontario, and choosing the wrong one costs time you may not have. This page sets out what each does, who it suits, and how to tell which applies to your company.

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Which Business Debt Solution Applies to You?

Business debt is not one problem with one answer. A company with $2 million in supplier debt and a viable order book needs something completely different from a sole proprietor with $80,000 in personally guaranteed credit.

Three questions decide it: how much unsecured debt, whether the business is viable, and whether you have access to funds. Answer those and the route is usually obvious.

At Metus Lykos Debt Law Firm we work through those questions with you before recommending anything.

What We Help Businesses With

Corporate Debt Restructuring

Division 1 Proposals

Commercial Consumer Proposals

B2B Debt Settlement

CRA Arrears Negotiation

Creditor Lawsuit Defence

Supplier and Trade Debt

Commercial Lease Arrears

Personal Guarantee Exposure

Director Liability Advice

Asset Restructuring

Wind-Down Planning

Debts That Survive Restructuring

CRA Source Deductions (director liability)

Secured Equipment Loans

Commercial Mortgages

Court Fines and Penalties

Debts Arising From Fraud

How to Choose the Right Route

Work through these in order. Each step narrows the options.

Total the unsecured debt

Under $250,000 opens the Commercial Consumer Proposal route. Above it, a Division 1 Proposal is the formal option. Exclude secured debt from this figure.

Decide whether the business is viable

If the business would make money without the debt service, restructuring works. If it would not, an orderly wind-down protects you better.

Check what you have guaranteed personally

Personal guarantees change everything. Debt in your own name may need a personal proposal alongside whatever the company does.

Assess how much time you have

A served claim or a CRA demand shortens the runway. A filing gives immediate protection; a negotiation does not.

Check what funds are available

Settlement needs a lump sum. Proposals need sustainable monthly payments. Without either, the options narrow to formal insolvency.

Get legal advice before you commit

These routes are not easily reversed. A first consultation costs nothing and often removes options you were wrongly considering.

Why Work With a Law Firm on Business Debt

Pros

The benefits of a consumer proposal

One firm handling every business debt option
Collection action stops once a proposal is filed
The business keeps trading through the process
Personal guarantee exposure assessed alongside company debt
Lawyers negotiating, not an impartial administrator
Options compared before you commit to any of them
Confidential from the first conversation
No fee unless we reduce what you owe

Cons

The disadvantages of a consumer proposal

Formal proposals appear on the public insolvency register
Secured lenders keep their rights over collateral
CRA source deductions remain a director liability
Full financial disclosure of the business is required
Restructuring only works if the business is viable

Signs Your Business Needs Legal Advice Now

Speak to us if any of these apply:
Suppliers have moved you to COD or cut your account
CRA has issued a demand or garnished the business account
You are servicing one facility with another
A creditor has issued a claim or obtained judgment
You have personally guaranteed business obligations
Payroll is becoming difficult to meet
You are weighing closing the business

We reduce your debt. Not your dignity.

Business Debt Solutions FAQs

01 Do you need to be in Ontario to work with us?

No. We are licensed by the Law Society of Ontario and act for businesses across the province. Most of the work is done by phone, video and email, and our office is in Markham if you prefer to meet in person.

02 Which option is cheapest?

Negotiated settlement usually carries the lowest professional cost but needs a lump sum. A Commercial Consumer Proposal costs considerably less than a Division 1 Proposal, which involves court approval. Cheapest is not always the right answer if it leaves creditors free to sue.

03 Can my business keep operating during restructuring?

Usually yes, and that is normally the point. Creditors generally accept a proposal because an operating business is expected to pay them more than a liquidation would.

04 Am I personally liable for my corporation's debt?

Generally not, unless you signed a personal guarantee or the debt involves CRA source deductions, where directors carry personal liability. Most owners have guaranteed more than they remember, so this is worth reviewing early.

05 What happens to CRA debt?

Corporate income tax and HST arrears can usually be dealt with in a proposal. Payroll source deductions are different, because directors are personally liable for them and that liability is not simply erased.

06 Will restructuring stop a creditor lawsuit?

Filing a proposal triggers a stay of proceedings that halts most unsecured creditor action, including lawsuits and garnishment. Negotiated settlement does not, which is the main trade-off between the two.

07 How much does this cost?

Our fee is a share of what we save you, so we only earn when we reduce what you owe. The first consultation is free and carries no obligation.

08 What if the business is not viable?

Then restructuring is the wrong answer and we will say so. An orderly wind-down that limits your personal exposure is often the better outcome, and knowing that early saves money.

09 How quickly can you act?

If a creditor has served a claim or CRA has issued a demand, call before the deadline passes. Settlement can move in weeks, and a proposal gives protection from the day it is filed.

Our Service Area

Real Debt Help, Wherever You Are in Ontario

Metus Lykos Debt Law Firm proudly serves clients across the entire province of Ontario. Wherever you call home, our lawyers are ready to review your situation and explain your legal options — confidentially, and free of judgment.

Toronto

Markham

Mississauga

Brampton

Ottawa

Hamilton

London

Windsor

Don't see your city listed? We work with clients across all of Ontario, in person and remotely. If you live in the province, we can help.

Take the First Step Toward Becoming Debt-Free

Not sure which route fits? Book a free, confidential consultation and we will work through it with you.