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Summary of different debt relief options available to you including:

Debt Consolidation, Credit Counselling, Consumer Proposal and Debt Settlement

Credit Counselling

There are a many different credit counselling services operating across Canada. These credit counselling organizations review your current financial situation. They may also provide advice on budgeting and speak with creditors on your behalf to negotiate a repayment schedule.


If this program is right for you, the credit counselling organization will collect your payments and will pay your creditors. Before agreeing to any program, you should be aware of the costs and administration fees charged by the organization, as these charges may increase your total cost.


Typically, the total amount you will pay will be equal to the total amount of your unsecured debt. This may stop the interest on the debts but will not reduce your total debt.

Debt Consolidation

Debt consolidation is a new loan that will pay off your existing debts into 1 monthly payment. This can be a good option if you have multiple debts at a high interest and can consolidate them into one loan at a lower interest rate.

Major banks offer consolidation loans if you have a steady income, good credit record and can afford the monthly payments.

The loan could be spread out over more years to reduce the monthly payment amount. It is best to ensure the new loan is at a lower interest rate than then your current loans for this option to make sense.

Consumer Proposal

A consumer proposal combines debts into one manageable and interest-free monthly payment agreed with your creditors by your Trustee. It is a legal contract, meaning all your remaining unsecured debts are included.


A consumer proposal must be completed within five years, meaning your affordable monthly payments can be spread across this time. A consumer proposal can be paid off early without any penalties. Reducing your monthly debt payments will allow you to save extra money and start rebuilding your credit sooner.

Financial freedom
couple seeking debt relief

Debt Settlement Program

A debt settlement program is usually offered by a debt settlement company or a debt consultant to negotiate with your creditors. The intention is to come to an agreement that both you and your creditors, to reduce the interest rate and pay off the balance of your debt.


This can be easier and less scary than negotiating directly with your creditors. However, you must make the monthly payments to pay all debt within a 2-to-3-year timeframe. There are also upfront fees, and there is no guarantee that creditors will agree to it. 


Debt settlement programs can also negatively impact your credit report.

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