No more debts: how to live a life free from debt

Posted on 2 June 2023

Written by Chris Galea

It was recently revealed that households in Canada now owe more than the country’s entire GDP. With a rising cost of living and increasing interest rates, this is less surprising than it might have once been. With high rents in major cities, fast growing mortgage debt, and increasingly expensive costs for groceries and childcare, it is little wonder expenses and debt are racking up more than they used to. You may be one of the Canadians struggling with overwhelming debt. If you are looking for a way to find yourself with no more debts, you are in the right place. In this article, we share your primary options when it comes to debt relief in Canada. We share how you can begin your journey to live a life free from debt. With over thirty years’ experience of helping Canadians find financial freedom, at Spergel we are here to help you too. Here are a few key steps you can take to begin a life with no more debts:

Understand your debts

You will need a plan in place to manage your debts and achieve your financial goals of living debt free. The first step is to be clear on the outstanding debts that you have and any money that you owe. Making a list is a good start, including the total amount owed, the monthly payments you are required to make, and the associated interest rates. Your list might include a mix of mortgage, car loan debt, credit card debt, payday loans, student loans, and so on. Knowing what you owe is the first step to reducing and even eliminating your debt.

Assess your budget

Now you know the debt that you owe, and the creditors owed, you need to understand how much money you have available to repay your debts. Knowing how much money is available to you will help you to create a budget. With a budget, you can establish how much money you will receive each month, how much you can spend, and what you need to save. A budget is often the pathway to successfully reaching your financial goals, and can help you to achieve a life of no more debts. Look critically at your expenses and see where you can reasonably cut back to put more funds towards your debt repayment.

Choose a debt repayment strategy

Now you know which debts you owe and your available funds, it is time to plan how to repay your debts. The different types of debt you have, their amounts, and the associated interest rates will likely inform the debt repayment strategy you choose. You might wish to choose from the following:

  • Debt snowball method – this method involves paying off your smallest debt first, before working towards repaying the next smallest debt, and so on. You will also make minimum payments across all your debts. This strategy works on the premise of feeling a sense of achievement for paying off debts to make you feel motivated to repay more.
  • Debt avalanche method – on the contrary, the debt avalanche method is said to be the most cost effective repayment strategy. It involves paying off the debt with the highest interest rate first (the most expensive) as well as any minimum payments across other debts, so that you pay less interest over time. While it may not give you the same motivational factor associated with the debt snowball method, it could save you hundreds or even thousands of dollars over a prolonged period.

In choosing your debt repayment strategy, you should aim for a realistic timeframe to have no more debts. If you are too ambitious, you may find it demotivating, so it is important to budget affordably and have a realistic goal in mind. Of course, the more time that goes past, the more interest you will pay, so the sooner you can repay your debts, the better.

Speak to your creditors

It is well worth being honest with your creditors, provided you are doing what you can to repay your debts. Showing your efforts and explaining your financial situation could in some cases lead to a benefit like a lower interest rate on your debt, an extension on your repayment period to reduce your monthly payments, and even a debt consolidation. If you owe money to family or friends, you should take your repayments seriously and prepare a repayment plan that they are satisfied with.

Find a form of debt relief for no more debts

At Spergel, we understand that finding the right debt relief solution for you can be difficult. With so many options promising to leave you with no more debts, the choice can sometimes be overwhelming. We are a team of experienced Licensed Insolvency Trustees – the only professionals in Canada legally able to file all forms of debt relief. This means we are well placed for reviewing your financial circumstances and advising you on the best options for your situation. Below are some of the most popular forms of debt relief we help Canadians to file.

Consumer proposal

A consumer proposal is a legal form of debt settlement, backed by the Bankruptcy and Insolvency Act. It is the process of suggesting an affordable monthly repayment to your creditors, which your Licensed Insolvency Trustee will help to negotiate on your behalf. If accepted, you will only need to commit to making your monthly payment for a period of up to five years. An increasingly popular bankruptcy alternative, consumer proposals can reduce your debt by up to 80%. Other advantages of a consumer proposal include full protection from your creditors via a stay of proceedings, and the ability to keep your assets including your home and car. At Spergel, we have a 99% acceptance rate on any consumer proposals we file. This means you have a 99% chance of reducing your debt by up to 80% when you file with us.


Bankruptcy is the legal process of assigning any non-exempt assets you may have over to your Licensed Insolvency Trustee in exchange for the clearance of your unsecured debts. Your assets will be sold, with any proceeds going towards the repayment of your creditors. Advantages of bankruptcy include no more debts – once discharged, you are free to begin a fresh financial future. You will also receive protection from creditors via a stay of proceedings, and any legal action including bank account freezes or wage garnishment will be immediately stopped. At Spergel, we can help you to rebuild your credit score so you are free to enjoy life after bankruptcy.

While there are a number of other debt relief options including debt consolidation loans, informal debt settlements, and credit counselling, consumer proposals and bankruptcy are the most effective pathways to no more debts. While other forms of debt relief may help to restructure your debt or reduce interest rates, consumer proposals and bankruptcy can substantially reduce or completely eliminate your debt. At Spergel, we understand that every Canadian’s financial circumstances are unique and therefore different forms of debt relief are right for different people. Our expert Licensed Insolvency Trustees can explain the advantages and disadvantages of each form of debt relief so you are well equipped to choose the right pathway for you.

If you want to learn more about having no more debts, book a free consultation with Spergel. We can help you to substantially reduce or eliminate your debts completely. If you are struggling to make your payments or are feeling overwhelmed by debt, we are here to help you. We have over thirty years’ experience of helping Canadians become debt free. Reach out today – you owe it to yourself.


Chris Galea

Chris Galea is a Chartered Accountant and Insolvency and Restructuring Professional with over 20 years’ experience as an LIT (Licensed Insolvency Trustee). He is also our resident expert on tax debt, COVID debt, and the region of Saskatchewan, Canada. When he’s not at the office educating people about bankruptcies and consumer proposals, Chris is playing pick-up hockey with his friends, spending time with his family, and learning Spanish!

Schedule a Free Consultation with Chris Galea (or your local Spergel LIT) by:

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