Debt Relief in Canada
When you are missing payments, relying on credit cards, or struggling with overwhelming debts, it can be stressful and confusing to know what to do and where to turn. In these circumstances, it is important to remember that there is always a pathway to debt relief, no matter what the situation.
In fact, many individuals have a choice of debt relief options – it is just about examining your own personal financial circumstances and deciding on the most appropriate pathway for you. At Spergel, unlike other debt relief firms, you will be assigned your very own Licensed Insolvency Trustee to walk you through each and every step of gaining financial relief.
What are my debt relief options in Canada?
There are some more informal forms of debt relief, and others that are formally backed by the Canadian government. The most important thing to do in any scenario is to contact a Licensed Insolvency Trustee to discuss the best option for you, based on your unique circumstances.
An informal agreement made with creditors to repay some of your debt. The important thing to note is that a debt settlement is not guaranteed, and cannot always be a trusted form of debt relief. You can offer a lump sum to creditors yourself, or go through a debt settlement company to whom you will pay fees. It is possible to pay a debt settlement company, only to be referred to a Licensed Insolvency Trustee to file a consumer proposal anyway.
A debt repayment plan laid out for you by a non-profit credit counsellor that groups your debt and allows you to pay it back over a number of years. While not a method of debt cancellation or debt reduction, credit counselling can ultimately lead to debt relief. Your credit counsellor will share your debt management plan with your creditors to review – if they agree to it, you will make monthly payments to the credit counselling agency.
A debt consolidation loan combines multiple smaller loans into one manageable payment. It is a form of debt relief that makes repayment simpler and often more affordable as debt consolidation loans typically have a lower interest rate. You can also spread repayments across a longer time period, making repayments more affordable.
Government backed debt relief
There are only two government recognised forms of debt relief in Canada under the Bankruptcy and Insolvency Act, both of which must be administered by a Licensed Insolvency Trustee:
A legal debt settlement that avoids bankruptcy while vastly reducing your debts and allowing you to keep your assets. A consumer proposal takes up to a maximum of five years, and is often the cheapest form of debt relief. It also offers a ‘stay of proceedings’, which offers protection from creditors meaning that they are no longer able to contact you or pursue lawsuits against you.
A legal process where any non-exempt assets are reassigned to a Licensed Insolvency Trustee to pay back outstanding debts to creditors in exchange for debt clearance and protection from creditors.
Which types of debt can be cleared through debt relief?
At Spergel, our team of Licensed Insolvency Trustees have gained debt relief for Canadians for over 30 years, helping with the following types of debt relief:
- Credit card debt
- Tax debt
- Medical debt
- Student loan debt
- Car loans
- Payday loans
- Outstanding bills
When is it time to seek debt relief?
You may need to seek debt relief if you are encountering one of the following situations:
A wage garnishment may be issued by your creditors or the Canada Revenue Agency if you have seriously defaulted on payments or not paid anything towards your debts. A wage garnishment is an order enforced by the court for an employer to send up to 50% of your wages to your creditors or the CRA to go towards paying off your debts. A Licensed Insolvency Trustee can walk you through how to stop a wage garnishment and seek debt relief.
Calls from collection agencies can be extremely stressful, and often the pressure to find the money to pay back your debts can feel like harassment. By speaking to an experienced Licensed Insolvency Trustee, you can learn more about your debt collection rights, how to permanently stop collection agency calls, and how to find debt relief. Your debt relief options to prevent collection agency calls include making an agreement with a collection agency, taking out a debt consolidation loan, filing a consumer proposal or bankruptcy.
You could be in search of debt relief due to spending more money than your income; overly relying on credit cards; borrowing money excessively; threats to pursue lawsuits against you; barely making your interest payments on borrowed credit; or having services cut off due to not paying bills. If you are seeking debt relief, speak to one of Spergel’s experienced Licensed Insolvency Trustees, who can walk you through the best form of debt help for you.
Jennifer’s Path to Debt Freedom
Jennifer heard the bankruptcy process would ruin her life – she hoped to buy a house someday and didn’t want to ruin her chances. Talking to a Licensed Insolvency Trustee HELPED Jennifer find the courage to review her options and she’s living debt-free today.
Read more stories like Jennifer’s.