Where To Get Debt Help In Canada

Dealing with debt can feel extremely isolating. But it’s important to know that you’re not alone. A recent survey by Maru Public Opinion, found 52% of Canadian respondents are worried about their personal and daily finances, 37% said they were struggling to make ends meet, and 30% were reliant on government programs.

Are you ready for the good news? Your debt does not define you, and it doesn’t have to last forever. A Licensed Insolvency Trustee (LIT) can review your finances and help you find the debt help strategy that fits your situation.

Debt Help in Canada

While you may hear claims of government debt relief programs from a variety of financial or credit counselling companies, there are only two legal government debt relief programs available in Canada. One is a Consumer Proposal, and the other is Bankruptcy.

A Licensed Insolvency Trustee (LIT) is the only debt expert qualified to administer either of these debt relief programs.

How to Find Debt Relief Through a Consumer Proposal

A Consumer Proposal is a legal process that involves working with an LIT to develop an offer to your creditors to:

• Pay a percentage of your debt
• Extend the time you have to pay

If your creditors accept your proposal, you have a maximum of five years to pay your debt. If your creditors don’t accept, you can update your proposal and try again, or you may have to file for Bankruptcy.

Who qualifies for a Consumer Proposal?

To qualify for a Consumer Proposal, you need to meet the following criteria:

• You’re a resident of Canada
• You’re insolvent (you can’t pay your bills when they’re due)
• You have debt over $1,000 but not exceeding $250,000 (not including your mortgage)

What are the benefits of a Consumer Proposal?

The main benefit of a Consumer Proposal is that it can help to reduce your debt so you can regain your financial footing. Other benefits include:

• Stops creditor actions. Wage garnishment, collection calls, and lawsuits against you will stop when you file a proposal
• Keep your assets. Unlike when you file for Bankruptcy, you don’t have to sell your assets.
• Consolidate your payments. There’s no more juggling multiple debt payments. When you file, all of your debts are consolidated into one easy-to-manage monthly payment.
• Avoid Bankruptcy. If you qualify for a Consumer Proposal, this helps you avoid filing for Bankruptcy.

How to Find Debt Forgiveness Through Bankruptcy

Bankruptcy is another debt relief program offered by the government of Canada. Like a Consumer Proposal, you’ll need to work with an LIT to file. Bankruptcy can help to eliminate most of your unsecured debts, including:

• Credit card debt
• Lines of credit
• Personal loans
• Payday loans
• Student loans (if you’ve been out of school for seven years or more)

A big difference between a Consumer Proposal and Bankruptcy is that your assets are sold in Bankruptcy to help raise money to repay your creditors. This doesn’t mean you will automatically lose your house.

Your house is a form of secured debt. If you’re able to continue making your mortgage payments, you may not have to sell your house.

Who qualifies for Bankruptcy?

To qualify for personal Bankruptcy, you must meet the following criteria:

• You’re insolvent
• You owe at least $1,000 in unsecured debt

What are the benefits of Bankruptcy?

The idea of filing for Bankruptcy might make you queasy. But, for some people, it’s the right decision. You have to remember the purpose of Bankruptcy is not to punish, it’s to give honest Canadians a second chance.

Similar to a proposal, as soon as you file for Bankruptcy, you gain protection from creditor actions. This includes wage garnishment, lawsuits, and collection calls. This alone can provide a lot of relief.

Other Debt Relief Strategies

By speaking with an LIT, you can see if you qualify for a Consumer Proposal or Bankruptcy. You can also discuss other debt-relief options, including:

Credit counselling services

Credit counsellors can provide a variety of services, including one-to-one counselling, group counselling, and debt management plans.

A counsellor can work with you to improve your knowledge on certain financial topics such as budgeting, credit, and general money management. There are not-for-profit credit counsellors as well as for-profit companies offering counselling services.

Before choosing a credit counsellor, research the company and ask questions about the counsellor’s education and experience.

Debt management plan

Debt management plans (DMP) are a service offered by some credit counsellors. In a DMP, you can consolidate your debts into one monthly payment. While you usually have to pay back all of your debt, your credit counsellor can try to negotiate with your creditors to reduce or eliminate the interest rate or fees on your debt or extend the time you have to pay.

If your creditors agree to the DMP, you will make a monthly payment to your credit counsellor, who will then pay the creditors on your behalf.

Before working with a counsellor on a DMP, make sure you understand how much it will cost, and figure out if it’s likely to save you money.

Debt consolidation

Debt consolidation is the process of rolling up multiple debts into one monthly payment. One way to do this is with a debt consolidation loan. The goal is to get a loan with a lower interest rate than what you are paying on your other debts. This way, you end up paying less in interest each month.

If you can’t qualify for a personal loan with a low-interest rate, you might consider a Consumer Proposal as another way to consolidate your debt into one monthly payment.

Get Debt Help Today: Speak to an Licensed Insolvency Trustee

There are many forms of debt help available in Canada. However, the only legitimate government debt relief programs are a Consumer Proposal and Bankruptcy. For either of these programs, you need to speak to a Licensed Insolvency Trustee. LITs are debt specialists who can assess your finances and find a debt relief program that fits your life and goals.

For a free, no-obligation consultation, call Adamson & Associates at 519-310-JOHN (5646), or fill out our online contact form.