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Debt Management: Your Guide to Effective Debt Solutions

What is debt management?

If you find yourself overwhelmed with credit cards, loans, or other debts, you’re not alone. Debt can be stressful but manageable with the right approach. Effective debt management is about understanding where you stand, creating a plan that fits your life, and taking practical steps to reduce what you owe. Learn how to regain control of your finances and build a healthier relationship with your money in our comprehensive guide to debt management.

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Eliminate Debt Problems Through Debt Management

Whether you’re overwhelmed with credit card debt, behind on a personal loan payment, or have a stubborn high-interest payday loan, there are lots of ways to reduce or eliminate your debt.

Debt management can include:

  • Credit counselling
  • Budgeting
  • Building healthy financial habits
  • Debt consolidation 
  • Bankruptcy
  • Consumer proposal

Your options are explained below.

Becoming debt-free is not out of reach. With the right debt management solutions, you can take control of your debt and build a stable future. 

 

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How Do I know If I Need Debt Help?

The first step to addressing your debt management problems is identifying your money habits. Do any of these signs sound familiar to you?

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Credit Misuse

Using credit because you don’t have enough cash and paying only the minimum monthly payment.

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Stalling One Creditor To Pay Another

This is a balancing act no one can maintain.

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Overcharging & Underpaying

Charging more on your credit cards than you pay back month-to-month.

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Cash Advance Game

Using a cash advance from one creditor to pay another.

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Branch Hopping

Applying for a second or third Visa or Mastercard at another branch, bank, or credit union.

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Habitual Credit Increaser

Continually asking for increased spending limits on credit cards.

Debt Management Through a Debt Consolidation Program

A Debt Consolidation Program (DCP) is a method of debt management that allows you to consolidate your debt into one affordable monthly payment. This also involves significantly reducing or eliminating the interest on your debts.

A Debt Consolidation Program addresses unsecured debt, including credit card bills, lines of credit, unsecured loans, or any other debt that doesn’t require collateral (like a car or a home). To get set up with a Debt Consolidation Program, start by taking our debt assessment quiz,  or by speaking to a certified Credit Counsellor for free.

During your call, your certified Credit Counsellor will:

  • Review your financial situation and develop a repayment plan based on your current income and expenses.

After that, they’ll:

  • Work with your creditors to arrange a single, lower monthly payment and waive or reduce the interest on your debt.
  • Conduct regular financial reviews to help you budget and guide you toward the successful completion of the program.

Click here to learn more about our Debt Consolidation Program.

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“Most Canadians say, ‘Repaying my debt is what I really want to do. I just can not afford to do it with the rising cost of living and the interest rates that are being charged.’”
- Mike Bergeron, Counsellor Manager with Credit Canada 

The Benefits of Having a Debt Consolidation Program in Place

A Debt Consolidation Program can help you overcome debt and provide you with the tools and habits you need for a lifetime of financial wellness. Other benefits include:

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Improved financial control

Restore your sense of control over your financial future

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Simplified repayment process

Consolidating multiple debts into a single monthly payment makes it easier to manage and stay on top of repayments

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Reduced stress

Knowing you have a clear plan to get rid of debt can bring peace of mind

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Protection from creditors

A debt management plan often stops creditors' collection efforts (depending on your plan), giving you breathing room to focus on repayment

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Debt-free timeline

A structured plan includes a clear timeline showing exactly when you’ll be debt-free

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Better financial habits

You’ll learn lasting money habits to protect your newfound freedom from debt

Other Debt Management Solutions

Credit Counselling

You don’t have to face your debt alone. Credit counselling can help you take back control of your finances if you’re feeling overwhelmed. In a confidential, one-on-one appointment, a certified Credit Counsellor will review your income, debts, and expenses.

You’ll receive personalized advice to tackle your unique situation, including creating a budget if needed and reviewing debt repayment options. When looking for a credit counselling agency, choose a non-profit, accredited agency like Credit Canada, where all Credit Counsellors are certified as Accredited Financial Counsellors.

Budgeting

Budgeting isn’t just a short-term fix; it’s a long-term solution to build financial stability. Your Credit Counsellor will help you create a realistic, sustainable budget to manage your cash flow over time and pay down your debts. Our free Budget Planner is an all-in-one tool to help you get started. You can also try using a budgeting app like Butterfly.

Whether you choose to budget on your own, with the support of a Credit Counsellor, or through an app, consider using the sustainable spending method:

  1. Analyze your income, debts, and expenses.

  2. Brainstorm ways to improve your cash flow, including cutting costs and increasing your income.

  3. Change your habits for long-term success.

Bankruptcy

Bankruptcy is a legal process carried out by a Licensed Insolvency Trustee (LIT). Filing for bankruptcy can clear most unsecured debts, including credit cards, personal loans, and income taxes. However, it comes with serious consequences, including a significant impact on your credit score and the potential loss of assets, depending on your province’s regulations.

If you’re deep in debt, bankruptcy might be your only option, but it’s worth considering other debt management strategies first. Speaking with a certified Credit Counsellor will help you understand all your options, so you can make an informed decision.

Consumer Proposal

A consumer proposal is a legally binding agreement facilitated by a Licensed Insolvency Trustee (LIT).  It allows you to negotiate with creditors to pay a portion of your debt, extend your repayment period, or a combination of both.

Unlike bankruptcy, a consumer proposal allows you to retain your assets and has a less severe impact on your credit score. While Credit Canada doesn’t administer consumer proposals, we can help you understand your options and refer you to a Licensed Insolvency Trustee if it’s the right path for you.

Take Our Debt Assessment Quiz

Are you in debt but aren’t sure how to get started? Each person’s financial situation may be unique, but by answering these four simple questions we can determine which debt relief option might be right for you. 

Take the Quiz

Client Reviews

Not all debt management companies are created equal. Credit Canada is a non-profit debt management agency that has helped more than two million Canadians get out of debt through a debt management plan. See how we've turned these people’s finances  – and lives – around and helped them become debt free!

A few years ago I had some debt issues and approached Credit Canada and Randolph Taylor for some help with consolidation. Randolph was very informative of all of my options and what course of action we should take. He took the time to explain all options and made feel like everything was going to be ok. At first I was very nervous to seek out any help but with Randolph's help and kind nature everything got resolved in a timely and professional manner. I would highly recommend Credit Canada and Randolph Taylor to anyone feeling the burden of debt. Since clearing up all of my debt a few issues came to light and when feeling overwhelmed I contacted Randolph and he helped me to figure everything out and has always been open to any follow up questions. I really appreciate everything Credit Canada and Randolph Taylor have done for me.

- Tyler Webster

Debt sucks, and it often feels insurmountable. It's so much easier to deal with when there is someone to help guide you through it. Credit Canada has helped so much, and I couldn't have done it without them. There's a one time, nominal service fee, and that's it. For the quality of service I've received and peace of mind I feel, I can say it's a huge bargain and soooo worth it. Right off the bat, I felt comfortable and reassured. My counselor, Randolph Taylor, has been consistently helpful and accommodating. It's such a relief to have someone in your corner to help you get you past the goal post.

- Martine Saldsman

I'm glad I discovered Credit Canada Debt Solutions. Four years ago I had an ever increasing high interest debt load that had gotten out of hand and was causing me stress and concern, as I didn't know where to begin, and then the phone calls started. Upon contacting Credit Canada I was connected with Randolph Taylor who was very understanding, professional and a calming influence. His expertise and experience soon had me on the way to becoming debt free, without further harassment from creditors and with a program that I was comfortable with. I highly recommend Credit Canada for your debt solutions. The service was excellent.

- M. Hamilton
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Get out of debt. Get back into life.

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.