Debt Relief in Nova Scotia: Your Rights, Consumer Proposals & Bankruptcy (2026)

Nova Scotia has a 2-year limitation period for debt collection, shorter than neighbouring PEI and Newfoundland which both have 6-year periods. However, Nova Scotia has the weakest wage garnishment protection in Canada at only 50%, tied with Alberta. This combination makes understanding your debt relief options especially critical for Nova Scotia residents.

Your Rights as a Debtor in Nova Scotia

Nova Scotia residents have specific consumer protections when dealing with debt collectors. Service Nova Scotia regulates collection agencies and enforces the Collection Agencies Act across the province.

Collection agencies operating in Nova Scotia must be properly licensed. Uniquely, Nova Scotia’s legislation applies to all debt collection activities, including business-to-business collections, not just consumer debts. Both collection agencies and their salespeople must hold valid licenses.

Collectors cannot use harassment, threats, or intimidation tactics. They cannot contact you at unreasonable times or discuss your debt with unauthorized third parties. You have the right to request written communication only and to dispute debts you believe are incorrect.

If a collector violates your rights, you can file a complaint with Service Nova Scotia. Creditors who use unlicensed collection agencies also face penalties under Nova Scotia law.

How Long Can Creditors Sue for Debt in Nova Scotia?

Under Nova Scotia’s Limitation of Actions Act, which came into effect September 1, 2015, creditors have 2 years to commence legal action for most debts.

The 2-year limitation period runs from when the claim was discovered or ought to have been discovered. This “discoverability rule” means the clock starts when you knew or should have known about the debt and the creditor’s identity.

Nova Scotia vs Atlantic Provinces

Nova Scotia’s 2-year period provides earlier relief from legal action compared to PEI and Newfoundland residents who face 6-year exposure.

Ultimate Limitation Period

Nova Scotia’s legislation also includes a 15-year ultimate limitation period. No matter when you discovered the claim, creditors cannot sue more than 15 years after the act or omission that gave rise to the debt. This ultimate limitation cannot be extended.

Once a debt becomes statute-barred in Nova Scotia, creditors can still call and send letters, but they cannot successfully sue you in court. You can raise the limitation period as a legal defence if sued after the 2-year window has passed.

For more information on how limitation periods work across Canada, see our guide on the statute of limitations on debt in Canada.

Debts With Different Limitation Periods

Not all debts follow the standard 2-year rule:

• Credit cards and personal loans: 2 years
• CRA income tax debt: 10 years (federal rules)
• Federal student loans: 6 years
• Court judgments: Extended enforcement periods
• Child and spousal support: No limit

Making any payment or acknowledging the debt in writing restarts the 2-year clock under the discoverability rule. Be cautious about making “goodwill payments” on old debts.

How Much Can Creditors Garnish From Your Wages?

Nova Scotia has the weakest wage garnishment protection in Canada at only 50%, tied with Alberta. This makes understanding your debt relief options especially important for Nova Scotia workers facing garnishment.

Nova Scotia Wage Exemption Rules

• 50% of gross wages are exempt from garnishment
• Minimum exemption: $330 per pay period (no dependents) or $450 per pay period (with dependents)
• Maximum garnishment: 50% of your wages

This means creditors can take up to half your paycheque if they obtain a court judgment against you.

Impact of 50% Garnishment

A Nova Scotia worker earning $4,000 per month could lose $2,000 to garnishment, while an Ontario worker would only lose $800 (20% maximum).

Nova Scotia vs Other Provinces

Nova Scotia’s 50% protection is the weakest in Canada, matching only Alberta. This makes consumer proposals particularly attractive for Nova Scotia residents facing garnishment threats.

Use our wage garnishment calculator to determine if your garnishment exceeds legal limits in Nova Scotia.

What Are the Rules for Debt Collectors in Nova Scotia?

Nova Scotia’s Collection Agencies Act has unique features compared to other provinces.

Key Differences from Other Provinces

Nova Scotia’s collection legislation:

• Applies to all debts: Unlike most provinces, it doesn’t exempt business-to-business collections
• Requires salespeople licensing: Both agencies and their salespeople soliciting business must be licensed
• Penalizes creditors: Creditors who use unlicensed agencies face penalties

Prohibited Collection Practices

Collectors in Nova Scotia cannot:

• Use threatening, abusive, or intimidating language
• Make false or misleading statements about the debt or their authority
• Contact you at unreasonable hours (generally restricted to 7am-9pm weekdays)
• Discuss your debt with unauthorized third parties
• Harass you or your family members
• Misrepresent the amount owed or legal consequences
• Add unauthorized fees to the debt

Your Rights When Dealing with Collectors

You have the right to:

• Request all communication be in writing
• Dispute the debt and request verification
• Ask the collector to stop contacting you
• Raise the limitation period as a defence if sued after 2 years
• File a complaint with Service Nova Scotia for violations

Debt Relief Options in Nova Scotia

Given Nova Scotia’s weak 50% wage protection, acting quickly when facing debt problems is especially important. Waiting for garnishment can cost you half your paycheque, significantly more than in most other provinces.

Nova Scotia residents have several debt relief options that provide legal protection and stop garnishment:

• Consumer proposals: Reduce total debt by 60-80% while keeping all assets
• Bankruptcy: Eliminate most debts if you have little income or assets
• Debt consolidation: Combine multiple debts into a single loan with lower interest
• Credit counselling: Work with a non-profit counsellor to create a debt management plan
• Debt settlement: Negotiate reduced lump-sum payments with creditors

Each option has different impacts on your credit, costs, and legal protections. Compare all debt relief options using our debt relief comparison tool.

Consumer Proposals in Nova Scotia

A consumer proposal is especially attractive for Nova Scotia residents because it provides immediate protection from the province’s aggressive 50% wage garnishment rules.

How Consumer Proposals Work

A Licensed Insolvency Trustee reviews your financial situation and proposes a settlement to your creditors. You typically pay 30-35 cents per dollar owed over 3-5 years through fixed monthly payments.

Once filed, a consumer proposal immediately triggers a legal stay of proceedings that:

• Stops all wage garnishment (protecting your full paycheque)
• Halts collection calls and letters
• Prevents creditors from suing you
• Freezes interest charges
• Protects you throughout the proposal term

Nova Scotia Consumer Proposal Statistics

In Halifax and throughout Nova Scotia, Licensed Insolvency Trustees offer free consultations to review your options and calculate potential proposal payments.

Why Proposals Are Critical in Nova Scotia

Given Nova Scotia’s 50% wage garnishment exposure, a consumer proposal provides:

• Immediate garnishment protection: Stop losing half your paycheque
• Debt reduction: Pay only 30-40% of total debt instead of 100%
• Asset protection: Keep your home, car, and RRSPs
• Predictable payments: Fixed monthly amount you can afford
• Credit rehabilitation: R7 rating clears 3 years after completion

The weak wage protection makes consumer proposals more urgent for Nova Scotia residents than for workers in provinces like Ontario or New Brunswick where garnishment is capped at 20%.

Learn more about how consumer proposals work and calculate your potential payment using our consumer proposal calculator.

Bankruptcy in Nova Scotia

Bankruptcy eliminates most debts through a legal process administered by a Licensed Insolvency Trustee. While more severe than a consumer proposal, bankruptcy may be the better option if you have little to no income or your debts exceed $250,000.

How Bankruptcy Works in Nova Scotia

When you file bankruptcy in Nova Scotia:

• Most unsecured debts are eliminated (credit cards, personal loans, medical bills)
• A legal stay of proceedings stops all collection action and garnishment
• You surrender non-exempt assets to the trustee
• You make income-based payments if your earnings exceed certain thresholds
• You attend two financial counselling sessions
• You receive a discharge after 9-21 months for a first bankruptcy

Nova Scotia Bankruptcy Exemptions

Nova Scotia law protects certain assets from seizure in bankruptcy:

• No home equity exemption (your home equity is not protected)
• $6,500 in vehicle equity
• Household furnishings and personal effects up to $5,000
• Tools of trade up to $7,500
• RRSPs (except contributions in the 12 months before bankruptcy)
• Certain insurance policies and pensions

Nova Scotia’s bankruptcy exemptions are among the lowest in Canada, with no home equity protection. This makes consumer proposals often more attractive for homeowners with equity.

Bankruptcy impacts your credit more severely than a consumer proposal, with an R9 rating remaining on your credit report for 6-7 years after discharge.

For more details, see our comprehensive guide on bankruptcy in Canada.

Finding a Licensed Insolvency Trustee in Nova Scotia

Only federally licensed trustees can administer consumer proposals and bankruptcies in Nova Scotia. Find a Licensed Insolvency Trustee using the Office of the Superintendent of Bankruptcy directory.

Licensed Insolvency Trustees operate throughout Nova Scotia including:

• Halifax – Largest city with multiple trustee offices
• Dartmouth – Part of Halifax Regional Municipality
• Sydney – Cape Breton Island
• Truro – Central Nova Scotia
• New Glasgow – Pictou County
• Yarmouth, Antigonish – Regional coverage

Most trustees offer free initial consultations to review your financial situation and explain your options. Many now provide video consultations for residents in rural areas.

What to Expect at Your Consultation

During your free consultation, the trustee will:

• Review your income, expenses, assets, and debts
• Explain the difference between consumer proposals and bankruptcy
• Calculate estimated proposal payments or bankruptcy costs
• Discuss how Nova Scotia’s 50% garnishment exposure affects your situation
• Answer questions about timing and credit impacts
• Outline next steps if you choose to proceed

There is no obligation to file after a consultation. Use this opportunity to understand all your options before making a decision.

How to File a Complaint Against a Debt Collector

If a collection agency violates Nova Scotia regulations, file a complaint with Service Nova Scotia.

Filing a Complaint

Contact Information:

• Online: Collection Agencies - Your Rights
• Phone: 1-800-670-4357
• Address: Service Nova Scotia, PO Box 2734, Halifax, NS B3J 3P7

What to Document

Before filing a complaint, gather:

• Date and time of each contact
• Names of collectors you spoke with
• Recording of calls if possible
• Copies of letters and emails
• Details of prohibited practices (threats, excessive calls, unauthorized disclosures)
• Account numbers and creditor information
• Evidence of unlicensed agency activity

Service Nova Scotia investigates complaints and can impose penalties on collection agencies and creditors that violate provincial regulations.

Next Steps for Nova Scotia Residents

If you’re dealing with debt in Nova Scotia, don’t wait until you’re facing 50% wage garnishment. Consumer proposals provide immediate legal protection and are especially valuable given Nova Scotia’s weak wage protection.

Recommended Next Steps

1. Calculate your options: Use our consumer proposal calculator to see how much debt you could eliminate and estimate monthly payments

2. Verify garnishment limits: Check if your wage garnishment exceeds Nova Scotia’s legal limits with our wage garnishment calculator

3. Compare all solutions: Review the costs, benefits, and credit impacts of all debt relief options using our debt relief comparison tool

4. Consult a Licensed Insolvency Trustee: Book a free consultation to review your specific situation and understand which option provides the best outcome

Related Provincial Guides

• New Brunswick debt relief guide – Compare Nova Scotia’s weak 50% protection to New Brunswick’s strong 80% wage exemption
• Prince Edward Island debt relief guide – See how PEI’s 6-year limitation differs from Nova Scotia’s 2-year period
• Newfoundland debt relief guide – Compare Newfoundland’s 6-year limitation and different wage protection rules

Nova Scotia’s 50% wage protection is the weakest in Canada, making consumer proposals especially critical for residents facing garnishment. Proposals provide immediate legal protection, reduce debt by 60-80%, and let you keep all assets. Take action now before garnishment starts or escalates.