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    The Government of Canada is concerned about high levels of debt for individual Canadians. In fact, Statistics Canada recently showed that the average Canadian household owes a record of $164.97 for every $100 of disposable, after-tax income.

    debt relief solutions

    One of the causes of this high debt level is the high cost of living in larger cities. In Toronto specifically, the high cost of buying a house has had an impact on individual debt levels.

    If you have large debts in relation to your after tax income, you may be finding it difficult to meet your ongoing monthly payments. If you have been making minimum or partial monthly payments and looking back you see that your overall debts have not declined over time, then you should realistically assess your situation. There are a number of options available to deal with debt.

    Each option has its own advantages and disadvantages. Some options work better in particular situations or for particular people. If you're in debt, you should consider meeting with a professional who is trustworthy and who has experience in working with people in these difficult and emotional situations.

    Options For Dealing With Debt

    Consumer Proposal

    A Consumer Proposal is a legal process where a federally licensed Administrator or licensed Insolvency Trustee helps you make a Proposal to your creditors to pay back a portion of your debt relief, often as little as 30%. This reduces your debt significantly, allows a person in debt to pay back the money he or she owes in smaller manageable payments over a longer period of time.

    One of the main advantages of a Consumer Proposal is that you will not lose ownership of your home or other assets during the process. Once the Proposal is accepted by a majority of your creditors, they are ALL bound to accept your settlement offer. In addition, all creditors are restricted from taking legal action against you once your Consumer Proposal is filed. You will also stop incurring interest charges.

    Credit Counseling

    Credit Counselling involves education on how to avoid incurring additional debt. The result of a Credit Counseling program is typically a Consumer Debt Management plan. This is a plan that helps reduce debt over a period of time. It can help you regain control of your financial life.

    Counseling services can work with creditors to eliminate late fees, reduce the amount of interest owed and even have the balance owing lowered, but debts are typically repaid in full. Under this option it is likely that you will have to make higher monthly payments than under a Consumer Proposal, and there is no ability to bind all of your creditors to the terms.

    Debt Settlement

    A Debt Settlement is when a debtor and a creditor agree on a reduced amount that will be considered payment in full. You or a debt settlement company will have to negotiate with each of your creditors individually to reduce the amounts owing. Any creditor who has not agreed to your offer can still take legal action against you.


    Bankruptcy is a legal process that gives a debtor who cannot meet his or her financial commitments a process for eliminating all of their debt. While you are in bankruptcy, no unsecured creditor can garnish your wages or initiate any collection action against you. In Canada, Bankruptcy can only be filed through a Licensed Insolvency Trustee.

    Debt Relief Is within Reach

    Different people in different situations will require different debt relief solutions. There is no “one size fits all solution.” Before making a decision on how repay your debt, you should meet with a licensed debt professional such as Licensed Insolvency Trustee or a Proposal Administrator to discuss all your debt relief options.


    More About Debt Relief Options

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