Financial Literacy in Ontario: Understanding Debt and Finances
- Bryan Litvack
- Oct 30
- 5 min read
Key Takeaways: Financial Literacy in Ontario
Financial literacy in Ontario is critical for understanding debt, credit, and legal relief options under Canadian law.
Many Ontarians struggle with high-interest debt, including credit cards, payday loans, and tax arrears, often without knowing their legal rights.
Licensed Insolvency Trustees (LITs) are the only professionals federally authorized to administer consumer proposals and bankruptcies in Canada.
A consumer proposal can reduce debt by up to 80%, stop interest and collections, and protect your assets.
Bankruptcy provides a legal fresh start when debt repayment is no longer feasible.
The Litvack Group offers free consultations, legal protection, and financial education to help you regain control of your finances.
Financial education includes credit counselling, budgeting strategies, and tools to rebuild your credit long-term.
Why Financial Literacy Matters When You're Struggling with Debt in Ontario
In Ontario, many people live with constant financial stress. The rising cost of living, stagnant wages, and easy access to high-interest credit have created a perfect storm for personal debt. Despite this, financial literacy remains low, and many individuals don’t know what real options exist to resolve their debt legally.
At the Litvack Group, we are Licensed Insolvency Trustees, federally regulated professionals who provide legal debt relief solutions under the Bankruptcy and Insolvency Act (BIA). We’ve seen how lack of financial education can keep people in debt for years longer than necessary. But we also know that with the right information, anyone can take control of their financial future.
Financial literacy is not just about budgeting. It’s about understanding how debt works, what your legal rights are, and what programs exist in Canada to help you get out of debt without loans, without gimmicks, and without shame.
What Are the Most Common Financial Challenges in Ontario?
Whether you live in Toronto, Ottawa, Sudbury, or anywhere in between, you may be facing some of these challenges:
Credit card debt with interest rates between 19% and 29%
Payday loans with annual rates that exceed 400%
Lines of credit or overdrafts that balloon over time
Student loans and unpaid taxes
Mounting bills and rent with no emergency fund
These debts create a snowball effect. You make minimum payments that only cover interest, not the principal. You borrow from one account to pay another. Eventually, you fall behind and that’s when the collection calls start or your wages get garnished.
Many people believe they have no choice but to keep borrowing or work extra jobs to survive. But there is a better path and it’s built into Canadian law.
How Financial Literacy Helps You Break the Cycle of Debt
When you understand the mechanics of debt, you gain power. Consider these examples:
Compound interest on credit cards can double your debt in less than four years if left unpaid.
Payday loans are structured so that borrowers re-borrow constantly, paying far more in fees than in principal.
Making only the minimum payment on a $10,000 credit card balance could take over 20 years to pay off.
Financial literacy helps you identify the warning signs early and seek help before your situation becomes critical. More importantly, it helps you recognize legitimate, legal options that most people don’t even know exist like consumer proposals.
Legal Debt Solutions in Ontario: What Are They and How Do They Work?
There’s a lot of misinformation online about debt help. Not all debt relief options are created equal, and some are outright scams. In Canada, the only professionals legally authorized to help you reduce or eliminate debt through federally regulated programs are Licensed Insolvency Trustees (LITs).
At the Litvack Group, we guide you through two of the most powerful and legal debt solutions available in Ontario:
1. Consumer Proposal
A consumer proposal is a legal agreement filed under the Bankruptcy and Insolvency Act (BIA) that allows you to:
Reduce your total debt — often by 60% to 80%
Stop all interest immediately
Avoid bankruptcy
Make one affordable monthly payment
Keep your assets (including car, home, savings, RRSPs*)
Your creditors vote to accept the proposal, and once approved, it’s legally binding. Collections stop. Wage garnishments stop. Your payments go to the Licensed Insolvency Trustee — not to a third-party collection agency.
Example: If you owe $40,000 in unsecured debt, a consumer proposal might reduce this to $12,000 payable over 5 years — just $200/month with no interest.
2. Personal Bankruptcy
If your income is too low to afford a consumer proposal, bankruptcy may be the right solution. It's not a failure. It's a legal fresh start designed to help honest individuals escape crushing debt.
When you file for bankruptcy in Ontario:
You get immediate protection from creditors
Most unsecured debts are eliminated
You may be discharged in 9 months
Collection calls and lawsuits must stop by law
You may have to surrender some non-essential assets, but many people keep their vehicle, household items, and RRSPs. We’ll explain all of this during your consultation.
How the Litvack Group Helps You Navigate Your Options
At the Litvack Group, we are Licensed Insolvency Trustees who are dedicated to giving you more than just debt relief. We offer clarity, respect, and a real plan.
We provide:
Free, confidential consultations
A complete breakdown of your legal options
Personalized advice tailored to your income, assets, and debts
Full explanation of what to expect before, during, and after filing
You’ll never be rushed or pressured. Our job is to explain, support, and empower.
Real-Life Example: Breaking Free From Payday Loan Debt
Client profile: A single individual in Hamilton had accumulated over $28,000 in payday loans and credit card debt. Monthly payments exceeded $1,100, and none of it touched the principal. Their account was frozen due to a wage garnishment.
What we did: We filed a consumer proposal that lowered their total debt to $9,600 — just $160 per month over 5 years. Within one week, the garnishment was lifted, and the collection calls stopped. Today, they are repaying their debt affordably and rebuilding their credit.
What Happens When You Contact a Licensed Insolvency Trustee?
Taking that first step can feel overwhelming, but here’s what actually happens when you reach out to the Litvack Group:
Free Consultation: We’ll listen and assess your situation without judgment.
Option Review: We’ll explain every option — including consumer proposal, bankruptcy, and alternatives.
Legal Filing: If you proceed, we file all documents and notify your creditors.
Immediate Protection: Collections, garnishments, and interest all stop — by law.
Repayment Begins: You start your debt-free journey with a clear, structured payment plan.
Financial Education for a Stronger Future
We don’t just help you get out of debt. We help you stay out.
As part of both consumer proposal and bankruptcy filings, you’ll attend two credit counselling sessions — where we help you build:
A realistic budget
Savings habits
Tools to manage credit in the future
You’ll also gain access to trusted resources to improve financial literacy.
Frequently Asked Questions (FAQs)
Is a Licensed Insolvency Trustee the same as a credit counsellor?
No. LITs are federally licensed professionals authorized to file legal debt solutions. Credit counsellors are not licensed to eliminate debt through legal processes like proposals or bankruptcies. Find out more about LITs here.
Can I file a consumer proposal if I have bad credit?
Yes. Your credit score does not affect your eligibility for a proposal. In fact, many clients improve their credit faster after filing.
Will everyone know if I file a proposal or bankruptcy?
No. Consumer proposals are private. Bankruptcy filings are public, but unless you are a high-profile individual, it's unlikely anyone will know unless they search federal records.
Take the First Step Toward Financial Recovery
You don’t have to face this alone. Whether you’re buried in credit card debt, struggling with payday loans, or worried about missed payments, there is a legal way forward and it starts with a conversation.
At the Litvack Group, we are Licensed Insolvency Trustees who care about people, not just numbers.
Book your free consultation today. No pressure. No judgment. Just real solutions that work.
Disclaimer:
This article is intended for informational purposes only and does not constitute legal or financial advice. For personalized assistance, contact a Licensed Insolvency Trustee in your area.
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