Updated October 16, 2026
Short answer: no. Missing the December 31, 2026 deadline does not automatically make you or your business bankrupt. An unpaid CEBA loan is likely to be assigned to the CEBA Program for collection, with the CRA assisting. Bankruptcy is something a debtor chooses, usually only when total debts are more than they can ever repay.
What happens if you don’t repay by December 31, 2026
- Your bank or credit union asks for the full balance.
- If it is still unpaid, the loan is likely to be assigned to the CEBA Program. By November 2024, about 70,000 loans worth $3.5 billion had already been assigned to the CRA for collection.
- The CRA tries to arrange a lump-sum payment or a payment plan. Interest keeps running during an arrangement.
Who is on the hook
- Corporations owe the loan themselves. The CEBA program did not require personal guarantees, so owners are generally not personally liable.
- Sole proprietors and partners owe the loan personally.
When bankruptcy or a consumer proposal makes sense
For sole proprietors and partners, a CEBA loan is unsecured debt that can generally be included in a consumer proposal (a negotiated settlement that avoids bankruptcy) or a personal bankruptcy. That is usually worth considering only if you also have other debts you cannot manage. A Licensed Insolvency Trustee offers a free consultation and is the only professional licensed to file either.
For a corporation, the options are different: the corporation can be wound down, and if it has significant debts beyond CEBA, a corporate proposal or bankruptcy may be possible. Get advice before deciding.
Better options to try first
- Refinance: if the business is operating, a new loan can pay off CEBA and replace it with monthly payments. Compare lenders.
- Partial payment: pay down what you can before December 31 to reduce what goes to collection.
- Payment arrangement: once the loan is assigned, contact the CRA early to set up a plan based on your ability to pay.
Related: CRA collections: default or refinance? and what happens if your business closes.
Next step
If your business is still operating, refinancing replaces the December 31 lump sum with regular payments. Compare lenders that refinance CEBA loans, or use the repayment calculator to size the payment.
This article is general information, not legal, tax or financial advice. ceba.ca is an independent website and is not affiliated with the Government of Canada. Official program information is at ceba-cuec.ca. If your loan has been assigned to the CEBA Program, the CRA CEBA Contact Centre is at 1-800-361-2808.