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Compare Your Debt Repayment Options
Options Other Than Bankruptcy to Help Solve Your Financial Problems
Proposal to Creditors...
This option allows you to advise your creditors that you are unable to repay all you debts, but are willing and able to pay a portion of your debts.
You pay way you can reasonably afford to pay. The exact portion of the debt that you would repay is based on your family income and the financial obligations. Any interest charges stop the day the proposal is filed with your creditors.
With the help of a Trustee, you would prepare an offer to your creditors. If the required majority of your creditors agree, the proposal is binding on all of your creditors.
If you wish to find out more about a proposal you will need to talk to a Trustee / CIRP.
Under this option you compromise or settle your debt generally for a lower amount with interest charges. There is also a fee to the Trustee / CIRP as set out under the Act.
Orderly Payment of Debts...
This option is not available in every province in Canada. You apply for a Consolidation Order setting out the amount and times when payments are due to the court. Payments are then distributed to your creditors. The interest rate is lowered to a rate set by the court.
In addition to payments to your creditors there is also an administration charge.
A Trustee / CIRP in your community will be able to advise you who to contact for this program.
Under this option you pay 100% of your debts, judgement interest and administration charges.
Informal Arrangements with Creditors and Credit Counselling...
You negotiate directly with your creditors with the assistance of a CIRP / Trustee or a Credit Counsellor. This option usually calls for the repayment in full of all your debts at a reduced interest rate.
Credit Counsellors / Agencies are not able to compromise Canada Revenue Agency debt. Only a proposal made under the BIA can accomplish this.
You need to exercise caution when you choose a credit counsellor, as anyone can call themselves a "credit counsellor". Before you commit yourself, enquire about their qualifications and the training they have competed, together with a full disclosure of how they are regulated. Ask if they are receiving funding from any of your creditors and how they are paid for assisting you.
Generally under this option you pay 100% of your debts plus interest and fees.
Debt Consolidation Loans...
Banks or financial institutions may "consolidate" your debts into one load. The lender pays off all of your debts to the different creditors and in return you make monthly payments to the lender.
To qualify, the lender will assess your income, credit rating and your ability to repay the debt.
Interest rates can vary and the lender may request a co-signer or ask you to pledge assets as security for the loan.
Under this option you pay 100% of your debts, plus the interest and any fees charged by the lender.
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