How to Get Out of High-Interest Debt in Ontario

Safe, Legal, and Life-Changing Solutions

High-Interest Debt Is Not Just a Financial Problem. It’s a Life Disruptor

Across Ontario, thousands of individuals and families are carrying debt with interest rates as high as 29 percent on credit cards or over 400 percent on payday loans. Even when you make your payments, the balance hardly moves. The result? Financial stress that can feel endless.

But here is the good news: there are legal, regulated solutions that can help you get out of debt and protect your assets, even if your credit is not perfect. These are not loans or quick fixes. They are formal debt solutions under Canadian law, and only a Licensed Insolvency Trustee (LIT) is authorized to administer them.

The Hidden Pressure of High-Interest Debt During the Holidays

Although high-interest debt is challenging year-round, the pressure often intensifies leading into the holiday season. From November to January, many Canadians experience increased financial strain due to holiday spending, gift expectations, travel costs, childcare needs during school breaks, and seasonal sales like Black Friday and Boxing Day.

Even individuals who manage their finances well throughout the year may find that holiday expenses push their credit limits higher, especially when relying on credit cards or short-term loans. As a result:

• Minimum payments increase in the new year

• High-interest balances grow faster

• Financial stress peaks when bills arrive in January

• Many households begin the year already feeling behind

If you are already struggling with high-interest debt, the holiday season can accelerate the problem and make repayment feel impossible. This is why many Ontarians seek advice from a Licensed Insolvency Trustee right before or after the holidays, once they see how quickly small purchases can snowball when interest rates are high.

What Counts as High-Interest Debt in Ontario?

In most cases, high-interest debt refers to unsecured loans with rates that make repayment nearly impossible. This includes:

• Credit cards with 19 percent to 29 percent interest

• Payday loans with annual percentage rates up to 45 percent

• Installment loans with daily interest or late penalties

• Store financing plans that balloon after promotional periods

If you are making minimum payments and the debt is not shrinking, you are likely caught in a debt interest cycle that is hard to break without professional help.

Why Choose a Licensed Insolvency Trustee?

A Licensed Insolvency Trustee is not a debt settlement company. LITs are officers of the court, regulated by the Office of the Superintendent of Bankruptcy under the Bankruptcy and Insolvency Act (BIA). They are the only professionals in Canada legally allowed to file consumer proposals or bankruptcies on your behalf.

Choosing an LIT gives you:

• Immediate legal protection from creditors and collection calls

• Access to government regulated programs like consumer proposals

• A clear, structured path to becoming debt free

Solution 1: Consumer Proposal – The Most Powerful Debt Solution Available

A consumer proposal is a formal agreement between you and your creditors. It allows you to repay only a portion of your debt with no further interest through affordable monthly payments.

Key Benefits:

• Reduce your total debt by up to 70 percent

• Stop all interest charges immediately

• Stop collection calls, wage garnishments, and legal action

• Keep your home, car, and other assets

• Rebuild your credit faster than with bankruptcy

Eligibility:

• You owe less than $250,000 in unsecured debt

• You have enough income to make monthly payments

Example:If you owe $40,000 across several high-interest loans, your LIT may negotiate a consumer proposal to repay just $14,000 over five years, about $230 per month, interest free.

Holiday Season Insight: Why More Ontarians File Consumer Proposals Between December and February

Every year, Licensed Insolvency Trustees across Canada see a predictable rise in filings immediately after the holidays. The reasons include:

• High-interest credit card balances from Black Friday and holiday shopping

• Increased cost of living pressures during winter months

• Overdrafts and missed payments appearing in January

• Tax season approaching and revealing financial gaps

The emotional weight of starting a new year already behind financially often motivates individuals to finally seek a structured, legal solution. A consumer proposal offers stability, stops interest, and provides that fresh start many families need heading into a new year.

Solution 2: Bankruptcy – A Legal Fresh Start When You Need It Most

While most people want to avoid bankruptcy, it remains a powerful legal option if your income is too limited to qualify for a consumer proposal.

What It Does:

• Immediately eliminates most unsecured debts

• Stops lawsuits, garnishments, and collections

• Offers a clear timeline for discharge, as little as 9 months

What It Involves:

• Surrender of certain non essential assets (many are exempt in Ontario)

• Completion of credit counselling sessions

• Monthly income reporting to your trustee

A Licensed Insolvency Trustee will explain both the advantages and responsibilities of bankruptcy, so you can make an informed decision.

What About Debt Settlement Companies and Credit Counselling?

Private debt consultants and credit counselling agencies are not licensed under federal law to offer proposals or bankruptcies. They may offer informal arrangements with creditors, but these:

• Do not stop legal action

• May not reduce your debt amount

• Often involve upfront fees or high service charges

In Ontario, only Licensed Insolvency Trustees are authorized to legally bind your creditors and stop collection action immediately.

Real Case Study: How One Toronto Family Paid Off $38,000 Without Bankruptcy

Before: A couple in Toronto owed $24,000 in credit card debt and $14,000 in payday loans. They were making minimum payments of over $1,100 per month with no end in sight.

After: Litvack Group filed a consumer proposal on their behalf for $15,600, just 41 percent of the original debt. Their new payment was $260 per month for 60 months, interest free.

They kept their assets, avoided bankruptcy, and started rebuilding their credit within one year.

Step-by-Step: What Happens When You Contact Litvack Group

Free Consultation - We start with a confidential review of your financial situation.

Explore Your Options - We explain all your legal options, including proposals, bankruptcy, or alternatives.

Take Action - If you choose to move forward, we prepare and file the legal documents.

Immediate Protection - Collections stop. Interest stops. Peace of mind begins.

Monthly Payments Begin - You make one manageable payment, with no surprises.

Your Legal Rights in Ontario: Know Where You Stand

As an Ontario resident, you are protected under both provincial and federal law.

• The Collection and Debt Settlement Services Act prohibits unlicensed companies from offering deceptive or unfair debt services.

• The Bankruptcy and Insolvency Act ensures fair treatment of debtors and provides a legal framework for debt relief.

Once a consumer proposal or bankruptcy is filed, creditors must stop all collection action. This includes calls, wage garnishments, and legal threats.

Frequently Asked Questions

Can I include payday loans in a consumer proposal? Yes. All unsecured debts, including payday loans, can be included.

Will I lose my house?

Most people keep their home. Your trustee will help you understand your specific situation.

Does a consumer proposal affect my credit?

Yes, but it is generally less damaging than bankruptcy. You can begin rebuilding credit during the proposal term.

Final Thoughts: You Do Not Have to Live in Debt

If you are living paycheck to paycheck and barely covering interest, it is time to explore a real solution. High-interest debt does not have to control your life.

The Litvack Group is here to help, with no judgment, no gimmicks, and no hidden fees. Just clear, legal, and practical steps to financial recovery.

Call to Action

Book your free consultation today. Let us help you break free from high-interest debt, legally, safely, and permanently.

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.