Debt Help in Canada: Paying Off Debt, Debt Relief and Dealing with Collectors

These guides cover the three stages of dealing with debt in Canada: paying it off yourself, getting formal relief when that isn’t enough, and dealing with collectors and creditors along the way. They’re grouped below by situation. Loans for consolidating debt are in the personal loans hub, and student debt has its own student loans hub.

Where to start

The options run from do-it-yourself to court-supervised. With a payoff plan you repay everything on your own schedule; with a debt management plan through a non-profit credit counsellor you repay everything, usually with less interest; with a consumer proposal you repay part under a legal agreement; and with bankruptcy your non-exempt assets and any surplus income go to creditors in exchange for a release from most debts. The debt relief options guide compares them side by side and explains how to narrow the choice.

Paying off debt yourself

• Debt payoff plan: the step-by-step plan, from listing every debt to knowing when to get help.
• Debt avalanche vs snowball: the two ways to order your debts, worked through on the same example.
• Debt payoff calculator: your debt-free date and total interest for several debts at once.
• Debt-to-income ratio: how to calculate it, what lenders accept and how to lower it.
• Debt consolidation loans: how consolidation works and where to borrow.
• Secured loans: the difference between secured and unsecured borrowing, and what a lender can take.

Getting relief

• Debt relief options: every option compared, and how to spot debt relief scams.
• Credit counselling: what a non-profit counsellor does and how a debt management plan works.
• Consumer proposal vs bankruptcy: the two legal processes, what each costs, what you keep and how long each stays on your credit report.
• Finances after bankruptcy: what happens between filing and discharge, which debts survive it, and how people rebuild.

Dealing with collectors and creditors

• Debt collection rights: what collection agencies may and may not do, and how to respond to one.
• How to negotiate debt: settlements, what to say, written agreements and pay-for-delete.
• Statute of limitations on debt by province: how long a creditor has to sue, and what restarts the clock.
• Wage garnishment: how a creditor gets a garnishment order, how much of your pay each province protects, and how to stop it.

Particular situations

• Can’t pay your bills: which debts to pay first, eviction and winter disconnection rules, and emergency help.
• Leaving Canada with debt: what happens to each kind of debt when you move abroad.
• What happens to debt when you die: what the estate pays, and when joint borrowers and co-signers are responsible.
• Debt and mental health: the link between debt and stress, warning signs and free support.