It can be hard to find the right debt relief solution that can help you get out of debt. The licensed insolvency trustees at Hoyes, Michalos & Associates are debt experts who can help you find the safest and best debt relief solution to deal with your debt problems and eliminate your debt.
Government Debt Relief Programs
We would like to offer a word of caution about websites and agencies that advertise Canada federal or government debt relief programs.
The only Canadian government debt relief program is a consumer proposal. A consumer proposal is a formal, legal debt settlement program available under the Bankruptcy and Insolvency Act. It is a safe, reliable debt relief program that allows you to avoid bankruptcy. A proposal is not bankruptcy, but it does provide the same creditor protection as bankruptcy. A consumer proposal can only be filed through a licensed insolvency trustee.
Every person’s financial problems are unique, and as such, no one debt relief program is right for everyone. Thankfully there are number of different programs that are designed to help you get out of debt. Each program comes with it’s own pros and risks. We recommend talking with a Licensed Insolvency Trustee like Hoyes Michalos to explore which option is right for you.
Top 5 Debt Relief Options in Canada
- Debt Consolidation: A debt consolidation loan is one new loan issued to pay off multiple small loans. Combining smaller loans and bills into one easy to manage payment can help make debt repayment automatic and more affordable. Generally, debt consolidation loans offer a lower interest rate and payment can be spread out over a longer period of time. It can be a good credit card debt solution as long as it deals with all of your outstanding debts. The risk is that a debt consolidation option does not eliminate your debt, it just makes repayment more manageable. You will also need to apply and qualify in order to take advantage of this option.
- Credit Counselling: Credit counselling is when a non-profit credit counsellor summarizes your debts and prepares a multi-year repayment plan for you. A credit counsellor will offer a solution called a debt management plan or DMP which allows you to pay back your debts over a period of three to five years. Your credit counsellor presents this option to your creditors and, if accepted, you make one monthly payment to the credit counselling agency. A debt management program is not a form of debt cancellation or debt reduction. You will still have to pay off all of your debt, but sometimes the interest relief received is enough to allow you to solve your debt problems.
- Debt Settlement: A debt settlement solution is an informal arrangement made with your creditors to pay back a portion of your debt. However, this arrangement is not guaranteed and fees are required to complete the process. If you have a lump sum of money already available, you can try to negotiate a settlement with your creditors on your own however we do not recommend most debt settlement companies as a trusted debt solution. Many charge high fees to refer people to a licensed insolvency trustee to file a consumer proposal.
- Consumer Proposal: A consumer proposal is a legally binding settlement between you and your creditors to pay back a portion of your debts, over a period of up to five years. At the end of the proposal period your debts are forgiven (technically discharged) and you can begin to rebuild your credit score. A consumer proposal is often the safest and cheapest debt relief option when dealing with debt.
- Personal Bankruptcy: Bankruptcy is considered the last resort option when dealing with debt. In Canada, filing bankruptcy is a legal process regulated by the federal government. It offers the honest, but unfortunate debtor protection from creditors and a discharge of all debts at the end of the bankruptcy term.
Each of these alternatives has its own benefits and risks of debt relief. Talking to a licensed professional is the best way to ensure you choose the solution that fits your needs.
Eliminate Your Debt
The best debt solution for you should solve all of your debt problems. Reducing interest through a debt consolidation loan is good, but not if it doesn’t ultimately eliminate your debt. Dealing with some credit card debt and outstanding bill payments is great, but not if you are left with large unpaid tax debts. And what if you have been unable to pay back your student loans even after years of trying?
We can help you eliminate:
- Credit card debt;
- Tax debts such as income tax debt, HST, and source deductions;
- Car loan shortfalls;
- Outstanding bill payments;
- Government guaranteed student debt as long as you have been out of school for seven years; and
- Payday loans.
You have a debt problem, or are going to have one, if:
- You spend more money than you have coming in;
- You use credit cards as a necessity, rather than a convenience;
- You borrow money to make it from one payday to the next;
- Creditors are threatening to garnish your wages, sue you or repossess your car, furniture or house;
- You pay only the interest or monthly minimums on your credit card debt or line of credit;
- You’re receiving phone calls from collection agents hired to collect payment of your debt;
- Utility companies cut off service because your bills have gone unpaid.
If you have experienced any of these situations, then it is time to seek debt help from our licensed and experienced professionals.
Better Debt Relief Services
There are many unlicensed debt consultants in Canada offering to help you through the consumer proposal process. However they charge large fees, only to refer you to a licensed insolvency trustee. At Hoyes Michalos we want your consumer proposal to be successful. That means negotiating proposal terms that you can afford, and that will be acceptable to the creditors. It is this middle ground that we are experts in achieving which is why we have a 99% consumer proposal acceptance rate and why our clients have a high completion rate.
As you have now learned, bankruptcy is just one of the multiple debt relief options available to you. It should be used as a last resort, and it will only be recommended by us if none of the other debt relief alternatives can work. A licensed insolvency trustee can determine how to get out of debt in your specific situation.
Our clients feel the relief of getting out of debt at their very first meeting. Our Debt Free in 30 approach to reviewing your options will help you find better ways to manage your debt problems. We are confident that our friendly and understanding professionals can help you choose the correct debt solution for your individual situation.
Contact us today and get a FREE, no obligation consultation. We can help to start you on the road to a more secure financial future, debt free.
Hoyes Michalos & Associates provides debt solutions and debt relief services in the following locations