Debt doesn’t have to be a burden you carry alone.
Many debt relief programs are available to Canadians to help reduce and eliminate debt. Our certified Credit Counsellors will work with you to assess your financial situation and help you start your journey toward financial freedom.
Whether you’re drowning in debt or just sort of keeping afloat, you should know that you’re not alone. Today, the average Canadian household debt remains near record-high levels, and surveys show that nearly half of Canadians are carrying non-mortgage related debt. Studies also reveal that Canadian households owe $1.79 for every $1 of disposable income.
And that’s not all. Canadians have the highest level of household debt to disposable income ratio out of all G7 countries, with the average Canadian owing $4,276 on their credit card. Read on to learn more about managing your debt, including debt-relief options, and how Credit Canada’s debt help services can help.
Percentage of Canadians carrying non-mortgage related debt
The amount Canadian households owe for every $1 of disposable income
Average Canadian credit card balance owing
There are a number of warning signs that might be telling you that your debt is unmanageable and that you need assistance. However, sometimes we choose to ignore the writing on the wall. For your own financial, physical, and mental well-being, here are some warning signs you should pay close attention to.
Difficulty Paying Credit Card Bills
This is often where it all begins. Maintaining even minimum payments on credit card bills becomes difficult, and you start to miss payments, resulting in expensive interest charges. You might find that you’re robbing Peter to pay Paul, surviving by transferring balances to manage credit card debt, or taking out cash advances.
Stress, Anxiety, and Loss of Sleep
Financial stress can keep us up at night, making it difficult to focus during the day. Worse, it can lead to anxiety, depression, and mental health challenges. In fact, one-third of Canadians describe most days as quite a bit or extremely stressful due to financial issues. Equifax even recommends credit counselling if you’re feeling the impact of money stress.
Arguing With Your Spouse or Partner
Debt problems and money issues are considered the number one reason why people argue, and can lead to broken relationships and even divorce, so it’s important to set financial goals with your spouse or partner to stay on (or get back on) track.
Receiving Collection Calls
Next comes the non-stop calls. If you’ve put your phone on vibrate to silence the rings of bill collectors and debt collectors, you probably know you’re in over your head and need debt help and advice. In the meantime, here’s how you can stop collection calls.
Learn more about the warning signs that you have too much debt. If you’re experiencing any of the four “debt symptoms” above, try our simple debt assessment quiz to get an idea of where you truly stand and what your debt relief options are.
Dealing with debt can be overwhelming, but understanding your options is the first step toward finding a solution that fits your needs. Fortunately for Canadians, there are various strategies, from credit counselling to Debt Consolidation Programs (DCPs), to bankruptcy, to resolve financial challenges. Each option comes with its own set of benefits and considerations. With the guidance of certified Credit Counsellors, you can choose the path that helps you regain control over your financial future. Read on to learn more about each of these debt relief solutions and which one might be right for you.
Debt consolidation is a strategy for combining multiple debts into a single payment. It can take two forms: a Debt Consolidation Program (DCP) and a debt consolidation loan.
A DCP is an arrangement between you, your creditors, and a third-party credit counselling agency that offers non-profit debt relief. When you enter into a DCP, your Counsellor will work with your creditors to:
Reduce or eliminate the interest on your debt.
Negotiate a lower monthly payment you can maintain and stop over-limit and late fees.
Set a completion date to pay off all your debt.
Stop collection calls.
If the creditors agree to the terms, you will send one easy monthly payment to the non-profit credit counselling agency, which then distributes that payment to all your creditors that are on the Program. This eliminates the hassle of paying multiple creditors for you.
While you are on a Debt Consolidation Program, you cannot use your credit cards to avoid more long-term damage to your credit. You can, however, use secured or prepaid credit cards. A certified Credit Counsellor can recommend lenders that offer these types of cards to help you rebuild your credit without accumulating more debt.
A Credit Counsellor will also provide other debt relief services to set you up for success. This includes building a personal monthly budget for you, showing you how to track and control your spending, setting financial goals, and learning how to make your money work for you.
A debt consolidation loan combines multiple debts into a single loan, often provided by banks, credit unions, and finance companies.
It gives you the convenience of one monthly payment; however, debt consolidation loans often require a co-signer or collateral such as a home. Loan recipients must also have a good credit score to secure a loan. A debt consolidation loan will have a set interest rate, although interest rates are usually lower than credit card rates.
Perhaps the biggest negative is that you’ll continue to have access to your credit cards. For some, this may result in overspending due to freed-up credit, which means they have to pay back the large loan and keep up with credit card bills on top of that.
Learn more about how debt consolidation can be part of your debt relief plan.
Debt can be stressful and overwhelming. Many times, those in debt feel helpless and alone and may feel judged by others. Our certified Credit Counsellors are here to lend a supportive, unbiased ear and help pave a path to a debt-free life. Credit counselling is a three-step process where our experts assess your situation, offer debt solutions, and provide money management and budgeting advice. Credit counselling is 100% free and completely confidential, so you have nothing to lose but your debt—and a whole lot to gain.
Check out our testimonials page to see what people like you are saying about the financial freedom they achieved with Credit Canada.
Learn more about Credit Canada’s FREE credit counselling services with personalized debt relief options.
Debt settlement services have been the focus of a consumer alert from the Financial Consumer Agency of Canada (FCAC) for unscrupulous practices and high-pressure sales tactics.
Often, they advertise paying only pennies on the dollar of your debt, but charge large up-front fees before any action is taken (if any is taken at all).
The Stronger Protection for Ontario Consumers Act has created standards of conduct for debt settlement agencies operating in Ontario. This includes banning up-front fees, placing limits on fees they can charge, requiring detailed contracts, and establishing a 10-day period where you can back out after giving it more thought. Use caution when dealing with debt settlement services and any company offering credit card assistance.
A consumer proposal (CP) is administered through a Licensed Insolvency Trustee (LIT). It allows you to reach an agreement with your creditors where you pay only a percentage of what is owed, with up to five years to pay it. Unlike a bankruptcy, where assets can be seized, CPs allow you to retain them.
It’s also important to understand that although you are paying back a portion of the debt you originally owed, a consumer proposal is still considered insolvency, similar to bankruptcy, so it will negatively impact your credit score.
If you’ve tried everything in your power to get out of debt and have exhausted all your other options, bankruptcy might be a solution to explore. It doesn’t mean you’ve failed and doesn’t reflect poorly on you as a person—it just means you might have made some poor credit choices or have fallen on some very hard times.
Bankruptcy is also administered through a Licensed Insolvency Trustee (LIT). When you file for bankruptcy, you will keep your essential assets, while unsecured debts such as credit cards, credit lines, personal taxes, and electricity bills are eliminated. Typically, a bankruptcy stays on your credit report for six years before it is removed.
So how do you know if filing for bankruptcy is the right option? Speak with a certified Credit Counsellor. They can evaluate your situation and, if bankruptcy is the best option for you, can provide a referral to a trusted LIT.
Learn more about how debt management can help you reduce and even eliminate your debt.
Some debt is considered good, while others can be more challenging to manage. Good debt might sound like an oxymoron, but when it comes to your credit history, it’s absolutely true. Good debt includes mortgages (because your home is expected to increase in value over time while the interest rate is relatively low for mortgages) and student loans (because your education is expected to earn you a better salary over time).
Challenging debt includes credit cards (because most items you charge to your credit card have little to no value and credit card interest rates are typically high) and auto loans (because cars and trucks depreciate in value as soon as you drive them off the lot). Even worse are payday loans, which have extremely high interest rates and high penalties for non-payment. If you need bad credit debt help—or assistance with those ugly payday loans—we’re here for you.
Learn more about the different types of debt.
If you’re going to try to repay your debts on your own, congratulations! It can be a bit daunting at first, so it’s important to use some smart repayment strategies to make it easier for you.
Tracking your spending is a great first step. While it might not sound like financial freedom, it’s one of the best ways to see exactly how much money is coming in versus how much is going out the door. This allows you to make important cuts in order to pay down debt or save up money. Tracking expenses also contributes to a more useful budget. Download our free expense tracker here to get started.
Once you’ve tracked your expenses and developed your budget, you’ll be able to see how much money you can dedicate each month to paying down your debts. Then, it’s time to decide which is the best method of debt repayment for you. Our Debt Calculator can show you how long it will take to pay off your debt using different payment strategies. Two popular strategies for debt repayment—and the debate rages on about which one is best—are the snowball and avalanche methods.
This is often where it all begins. Maintaining even minimum payments on credit card bills becomes difficult, and you start to miss payments, resulting in expensive interest charges. You might find that you’re robbing Peter to pay Paul, surviving by transferring balances to manage credit card debt, or taking out cash advances.
This method involves paying as much as you can towards the debt with the highest interest rate first, while maintaining minimum payments on all the rest of your debts. This debt repayment strategy can potentially save you thousands of dollars in interest charges.
If you’re struggling and need debt assistance, be sure to sign up for our Credit Canada blog for useful tips, strategies, cutting-edge information, and consumer debt help tools delivered straight to your inbox.
Managing and eliminating debt is absolutely possible with a clear goal and a plan to get there. The best approach to setting goals is to make them “SMART.” SMART goals are:
Once you’ve determined your SMART goals, you need to make some foolproof plans for how you’ll achieve them. This is when it’s time to sit down and think, “What will help me with my debt?” For example, will you begin tracking your expenses better? Will you make lifestyle changes, like packing lunches, quitting smoking, or buying generic food brands? Will you pick up a part-time job or a side hustle, such as selling crafts online, dog walking, mystery shopping, or driving an Uber? Will you seek online debt relief or loans to consolidate debt? Or will you finally create that budget you’ve been meaning to put together? (If that’s part of your plan, our Budget Planner and other free tools are real debt helpers!)
It’s very easy to dig yourself into a financial hole, but it can be very difficult to get yourself out of one. If you’ve tried to reel in your finances but they keep spinning out of control, Credit Canada is here for you. Our certified Credit Counsellors offer free debt relief advice and can discuss all of your debt relief options with you.
We also understand that you have a lot of choices, and Googling “debt help Canada” can turn up dozens of companies—so who can you trust? Unlike some debt assistance companies, Credit Canada is a non-profit agency with over 50 years of debt support experience in Canada. Our certified Credit Counsellors have worked with over two million people to resolve more than $350 million in debt. We’d like to do the same for you.
Contact us today at 1.800.267.2272 to get debt relief and a free debt assessment or apply for our financial coaching program, Credit Canada GOLD.
To speak to someone right now, call: 1 (800) 267-2272
Or, request a callback from one of our certified credit counsellors. It's free.