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What We Do

Break the
Payday Loan Cycle

Rolling payday loans every two weeks just to keep the lights on? At almost 400% effective APR, payday loans are designed to be impossible to repay. A Licensed Insolvency Trustee can deal with all of them — at every lender — in one filing.

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CASH ADVANCE
Loan Slip #1
Principal$500
Fee$75
Term14 days
DUE$575
Payday · Fri
QUICK LOAN CO.
Loan Slip #2
Principal$800
Fee$120
Term14 days
DUE$920
Payday · Fri
PAY DAY EXPRESS
Loan Slip #3
Principal$600
Fee$90
Term14 days
DUE$690
Payday · Fri
DISCHARGED
Every Loan, Every Lender -
One Filing
Stop pre-authorized debits
End collection calls
Deal with every loan at once
One affordable monthly plan
The Basics

Why Payday Loans Are Almost Impossible to Pay Off

A payday loan is a small, short-term loan — usually $100 to $1,500 — that you agree to repay in full out of your next paycheque, two weeks later. In return, you give the lender a post-dated cheque or a pre-authorized debit against your bank account.

Ontario law caps the fee at $15 for every $100 borrowed. That sounds modest until you do the math: borrowing $500 for two weeks costs $75, and annualized that's an effective rate of roughly 390% APR — about twenty times what a credit card charges.

The problem is what happens on payday. After the lender takes their $575, most people don't have enough left for rent and groceries — so they take out another loan the same day, often from a different lender. The cycle starts.

In-Store Payday LoansOnline Payday LendersCash AdvancesTitle / Pawn Loans
A Typical Payday Loan Stack
Sample illustration
Lender A — $500 + fee$575.00
Lender B — $800 + fee$920.00
Lender C — $600 + fee$690.00
Online lender — $400 + fee$460.00
Fees paid this cycle+$345.00
Total owed across all lenders$2,645.00
In a Consumer Proposal~$800
All payday loans are unsecured — every lender, every loan, every fee can be combined into a single Consumer Proposal at a fraction of the balance.
The Cycle You're In

The Two-Week Trap

A payday loan isn't expensive credit — it's a different kind of product altogether. The fee structure only works if you can't repay in full on payday. The lender's business model depends on it.

Week 1
$500
Borrowed
→
Week 2 · Payday
$575
Repay in full...
then re-borrow
→
Week 4 · Payday
$575
Repay, re-borrow,
+ a new lender
→
Week 12
$450
in fees alone
MortgageFixed 5-year
5.2%
Bank line of creditUnsecured
9.99%
Credit cardStandard
19.99%
Subprime auto loanBad credit
29.99%
Payday loan$15 per $100 / 14 days
≈ 390%
A single $500 payday loan rolled over six times costs $450 in fees — almost the entire principal — and you still owe the original $500. By design, the loan is profitable only if you can't pay it back.
If You Fall Behind

What Payday Lenders Can Do

Payday lenders are aggressive collectors with direct access to your bank account. Knowing their playbook helps you act before they do.

Direct bank account withdrawals
The lender holds your pre-authorized debit or post-dated cheque. On payday they pull the full amount before you can pay rent — and if it bounces, they re-submit, generating multiple NSF fees from your bank.
NSF fees that stack up
If the debit fails, the lender re-tries — sometimes daily. Each attempt your bank can charge an NSF fee of $10, on top of the lender's own dishonoured-payment fee.
Calls to you, your work, your family
Within days of default, calls begin — and unlike a bank, payday lenders are known for calling employers and emergency contacts you listed on the application, pressuring them to pass on the message.
Sold to collections
After 90+ days the account is sold to a third-party agency at pennies on the dollar. The agency then pursues the full balance plus added fees, often more aggressively than the original lender.
Lawsuit & wage garnishment
A collection agency or the lender itself can sue in small claims court and obtain a judgment — which lets them apply for a wage garnishment of up to 20% of your gross pay.
Damage to your credit
More payday lenders are now reporting to Equifax and TransUnion. A defaulted payday loan and the resulting collection account can drop your score by 80 to 150 points, and remain for six years.
How You Got Here

A Payday Loan Is Almost Never the First Problem

Nobody borrows at 390% because they want to. People take a payday loan when the bank has already cut their credit limit, when the credit card is maxed, or when payday is still five days away and rent is due today.

The first loan is usually small — $300 to $500 — and it does solve that week's problem. The trouble starts on the very next payday, when the lender pulls the full repayment out of the account and there isn't enough left to cover the bills for the next two weeks.

So a second loan is taken out, often from a different lender so the first one doesn't catch on. Within three or four cycles, most clients we see have three to six active payday loans and are paying $300 to $700 in fees every two weeks — money that goes straight to the lenders, not to reducing the balance.

➜
➜
➜
➜
Borrow
$500
Payday
repay $575
Short on rent
nothing left
Borrow again
same day
−$75
in fees,
every cycle
A cycle that's designed not to end
The same dollar is borrowed, repaid and re-borrowed every two weeks — only the fees pile up. The principal never goes down.
Your Options

How to Break the Payday Loan Cycle

Four real paths out. The right one depends on how many lenders are involved, what else you owe, and whether you still have credit available elsewhere.

1
Negotiate an Extended Payment Plan
Ontario law requires payday lenders to offer an extended payment plan after a third loan in 63 days — typically two or three pay periods. Useful for a single loan with one lender, but it doesn't help if you owe several lenders at once, and it doesn't reduce the balance.
2
Debt Consolidation Loan
Replace the payday loans with a single bank or credit union loan at a much lower rate (typically 10% - 20%). Reduces interest dramatically but not principal, and requires decent credit and steady income — most people deep in payday loans no longer qualify on their own.
3
Credit Counselling / Debt Management Plan
A non-profit credit counsellor consolidates your payments and tries to negotiate reduced interest with each lender. The full principal is still owed and payday lenders are often unwilling to participate — they don't have to, and many simply refuse.
4
Consumer Proposal or BankruptcyMost Effective
A legally binding filing under federal law. The day you file, an automatic stay of proceedings stops every withdrawal, every call, and every collection action — across every payday lender at once. The balances are reduced (often by up to 80%) and rolled into one affordable monthly payment over up to five years.

Stop the Two-Week Cycle For Good

Book a free, confidential consultation. In 30 minutes, we'll add up every payday loan and show you one affordable monthly payment.

Book My Free Consultation →
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Common Questions

Pay Day Loans Frequently Asked Questions

Quick answers to what we hear most from Ontarians stuck in the payday loan cycle.

Q
Can payday loans be included in a Consumer Proposal or Bankruptcy?
Yes. Payday loans are unsecured debts, just like credit cards. They can be combined with all your other unsecured debts into a single Consumer Proposal or Bankruptcy. Interest stops the day you file and collection activity halts immediately.
Q
What is the real interest rate on a payday loan in Ontario?
Ontario law caps payday loan fees at $15 per $100 borrowed for a two-week term. While that sounds small, the annualized cost works out to roughly 390% APR — about twenty times the rate on a typical credit card, and more than ten times a high-interest subprime loan.
Q
I have payday loans at multiple lenders. Can I deal with them all at once?
Yes. Most clients who reach us have 3 to 6 payday loans active at the same time — storefront, online, and app-based lenders. All of them can be included in one Consumer Proposal or Bankruptcy filing, along with any credit card, tax or other unsecured debt.
Q
The lender has my void cheque. Can I stop them from taking money?
Yes. The moment you file, a federal stay of proceedings takes effect. Any pre-authorized debit or post-dated cheque from the payday lender should be stopped. We suggest opening a new bank account where no creditors have access before doing a consumer proposal or bankruptcy.
Q
Can I just stop paying the payday lender and let them write it off?
In most cases, no. Unlike a bank that may eventually charge a small balance off, payday lenders almost always sell defaulted accounts to aggressive collection agencies and frequently sue in small claims court. A judgment can then become a wage garnishment that costs far more than dealing with it through a proposal.
Q
What about online or instant-loan apps?
Online lenders, instant-loan apps and "line of credit" products from payday-style lenders all work the same way and are treated identically by federal insolvency law. Whether the loan came from a storefront on Yonge Street or an app on your phone, it can be included in your filing.