How to Get Out of Debt? The Question of the Hour

Posted on 22 November 2017

Over the last 2 years, Canadian mortgage rules have changed significantly, making refinancing harder, and with interest rates going up this could shift supply and demand, thereby impacting housing values. We often have clients come to us wondering how to get out of debt amidst these changes. This week we’re covering two of the most popular options: a consumer proposal and bankruptcy.

When you’re overwhelmed by your financial situation and concerned about how to get out of debt when it seems to have taken over your life, know that you’re not alone. Thousands of Canadians struggle with such concerns on a daily basis. Both a consumer proposal and bankruptcy offer significant relief from debt that has become unmanageable, giving you a chance to start fresh.

A consumer proposal is a legally binding agreement between you and your creditors. It is an arrangement that’s negotiated with your creditors by a Licensed Insolvency Trustee wherein an amount to be repaid is proposed, and once accepted, usually reduces your debt and results in one monthly payment.

The benefits of a consumer proposal also include protection from collection action (and a stop to all currently being levied against you), no interest, and a repayment term of 4-5 years, not to mention a fresh start financially.

A bankruptcy is similar in that it is a legal process wherein you repay a portion of your debts to your creditors.  A Licensed Insolvency Trustee administers your bankruptcy, distributing funds to your creditors as repayment. When you file bankruptcy, collection action stops, as does interest.

During the term of your bankruptcy, which can last for as few as nine months, you will have certain obligations to fulfill including providing a monthly income statement to your Trustee and attending credit counselling sessions. Once your bankruptcy is complete, you will be discharged and can start on fresh financial footing.

Know that there is no ultimate silver bullet, no magical formula. Even in bankruptcy you have to pay something, but the end results will leave you with significant relief. Both of these options are very valuable, and discussing your situation with a Trustee is the best way to find out which one is best suited to your situation.

If you’re wondering how to get out of debt, we’re here to help. With over 25 years of experience, Spergel can help you find the right solution for your situation.

Call us today, toll free, for a free consultation: 310-4321.

Helpful starting information:

What to Bring to an Appointment

To get the debt help that you need, please bring a list of who you owe and how much to each, a list of everything you own and your monthly household budget. Don’t have everything right away? Don’t worry – We will guide you through each step.

Download Form

Your Information

We’ll walk you through our application process. But, if you want to prepare for your debt free assessment consultation in advance, download our information form and fill in what you can.

Download Form

Calculate Your Debt Repayment Options

How can you compare your debt repayment options if you don’t know how much they will cost you? Your solution will become much clearer when you are able to compare costs.

Debt Calculator

Ready to Be Debt-Free?

If you’re ready to be debt free, it’s time to meet with one of our knowledgeable Licensed Insolvency Trustees at your convenience and get started

Meet with a trustee