Debt Help Canada

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Debt Help Canada

Sometimes it can feel like you are drowning when you feel overwhelmed with debt.  And yet it is often unclear what your options to get some debt relief are. 

Did you know?

  • That 48% of Canadians say they are $200 away from not being able to pay your bills as they come due*
  • 20% of Canadian households are behind on bill payments while 94% are worried about falling further behind**
  • delinquency rates (failing to pay) are at 14% which is up 1.19%***
  • 40% of Canadians feel overwhelmed by debt ****

If you’re feeling overwhelmed by debt you are not alone. Let’s define what it means to be in debt first, look at some warning signs and determine what options are available to you if you are feeling overwhelmed with debt.   

What is Debt?

Debt is defined as money that is owed or due.  Some examples of debt may be a mortgage, car loan, credit card balances, student loans and a line of credit.  Debt seems unavoidable for most of us even if we just look at home ownership.  Not all debt is worrisome, and we are not fans of labeling debt good or bad, it just is.   So, when do you need help with paying debt?  Let’s look at seven warning signs that might indicate your debt may become overwhelming. 

Seven Warning Signs Debt is Drowning You

  1. Only making minimum payments
  2. Use credit to pay credit
  3. Borrow from friends & family to make ends meet
  4. Miss payments on due dates
  5. Consider/have applied for a high interest pay day loan to get by 
  6. Are starting to see debt affect your daily life through worry and anxiety 
  7. Feel shame, guilt and embarrassment about your financial situation

If you are seeing these warning signs check out our signs of financial trouble blog and 5 steps to take

What are your options?

It’s interesting that even though 40% of Canadians say they are overwhelmed by debt, no one really talks about it.  WE often feel safe to talk to a friend about troubles with a spouse but feel huge shame to share that we might have trouble making our mortgage.  Yet – 40% of us say we are overwhelmed so it is a common experience.  Even in the rare instances that we do discuss it with friends and family, common knowledge around reputable debt help options can be hard to find.  So lets make it is easy.  Straight talk on options if you are feeling overwhelmed and some considerations for each as you determine what is right for you.

  1. Consolidation Loans

This is the one option commonly discussed with friends and family, some how it’s become mainstream.  But, what exactly is a consolidation loan?  It is a loan to consolidate (put together) all your outstanding debt into one loan with one payment.  Not all consolidation loans are created equal. Be sure to do you research, ask about fees, interest rates and how interest is calculated.  Most often consolidation loans show up as a “Home Equity Line of Credit” (HLOC).  You first need to qualify for this large line of credit and it is important to remember that it is secured.  That means, if you do qualify and for some reason you don’t pay the loan, you are signing a document to say that the bank can take your house if you default.  If your credit is poor, this may not be an option for you if you don’t qualify.   If you are successful in obtaining a loan to consolidate, make sure you are aware of the interest rate.  The value in this option is that typically HLOCs provide a much lower interest rate than a typical credit card which allows you to put all the debt into one place, while paying off the balances in the higher interest cards.  This should provide a bit of interest relief to help your dollars go to paying off more in the principle owed.

  1. Credit Counselling

You’ve seen the ads on TV on billboards and on the radio.  What exactly is it and how does it work? Credit Counselling is a debt repayment program where you pay back every cent you owe your creditors at a fixed interest rate with one monthly payment.  Credit Counsellors work with creditors to negotiate better terms on your behalf.   Credit counselling has long standing relationship with some creditors (but not all).  On example of a creditor that they cannot include is the CRA.  Be sure that you know which creditors are included.  These options typically affect your credit at an R7 and are not legally binding on creditors.  So if for some reason a creditor changes their mind, there is no legal way to stop their further actions. 

  1. Consumer Proposal

Many people have heard of Bankruptcy, but most people do not know the alternative to it which is Consumer Proposal.  A Consumer Proposal allows you to pay back only a per cent of what you owe with no interest.  Consumer Proposals in Canada can only be administered by Licensed Insolvency Trustees like Bromwich+Smith, who negotiate with your creditors based on your budget. When you sign your Consumer Proposal creditors are legally bound not to contact you and seize collection activities. Some benefits of a consumer proposal is that you can roll all your debt into one payment, zero interest, your payment never changes (even if you income goes up) and you can keep your assets (provided you can continue to make payments). 

  1. Bankruptcy

Bankruptcy is the last resort but not the end of the world.  In some cases, declaring bankruptcy can be the best option to eliminate debt and allow you to start over with a clean slate. A Bankruptcy can only be administered by a Licensed Insolvency Trustee like Bromwich+Smith, once signed, it affords you legal protection from your creditors which means peace of mind for you.  Something to consider in this option is you will likely have to sell your assets (some exemptions apply). 

The most important thing when considering debt is to be your own advocate.  Understand the options, ask questions and know the long-term affects for you and the family. 

Licenced Insolvency Trustees, Bromwich+Smith have debt relief specialists available to offer debt advice and debt restructuring entirely from the comfort of your own home. Now offering video appointments with clients, Bromwich+Smith’s Debt Relief Specialists are available for initial free, no obligation, confidential consultation by phone at 1-855-884-9243 or request a call back at

By Taz Rajan Community Engagement Partner at Bromwich+Smith
Taz has been in the finance industry for nearly 2 decades and has always been passionate about education and empowerment.  Having declared bankruptcy herself, she intimately understands the shame, stigma surrounding matters of debt as well as the joy and relief that comes from restructuring.  Taz actively works to normalize the conversation of debt through blogs, media interviews, webinars, lunch & learns and through building relationship.



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