Whether you owe a lot or a little, having any amount of debt can be worrying. Thankfully, there are always options for managing your debt. If you owe large amounts, there are programs available to help you pay off your debt and begin to rebuild your credit. If you owe a smaller amount, simple debt management tips may be enough to save you from getting too deep into debt.

Keep reading to find out some different options if you are concerned about your debts.

Debt Consolidation

Debt consolidation involves getting approved for a new loan to pay off multiple small loans. By combining your smaller loans and bills, you can make your debt repayment more affordable and manageable by having one payment with a lesser overall interest.

Debt consolidation loans usually offer a lower interest rate and the payment schedule can be spread out over a longer period of time.

Debt Settlement

Debt settlement is an informal arrangement made between you and your creditors that involves only paying back a portion of your debt.

While there are fees associated with this process, it can be helpful if you have a lump sum of money available and you can personally negotiate that amount with the creditors. If you are negotiating in this way, it’s very important to keep records of all your correspondence. 

Consumer Proposal

A consumer proposal is similar to a settlement, but you have five years to pay back the negotiated portion of your debt. Unlike informal settlements, consumer proposals are a legal process regulated by the government and offers protection from creditors as well as a discharge of all your debts upon completion of the proposal. Consumer proposals are also based on your ability to pay – your Trustee will assess your income and assets to determine what you are able to contribute into a proposal. Upon successful completion of your consumer proposal, your unsecured debts are cleared. 

Consumer proposals are ideal for those looking for a simpler alternative to bankruptcy that still offers the same legal protection from creditors and will let you lock in a payment agreement for the duration of the proposal. 


As a last resort, you can also consider bankruptcy to deal with your debts.

In Canada, bankruptcy is a legal process that is regulated by the federal government that offers you protection from creditors as well as a discharge of all your unsecured debts once the bankruptcy term is complete. Bankruptcy is best suited for those who have large debts they cannot repay, are being harassed by collectors, can’t make their mortgage payments, or all of the above. 

Credit Counselling

Alternatively, you can always seek credit counselling. Credit counsellors can summarize your debts and create a repayment plan for you.

These are called Debt Management Plans (DMP) and they allow you to repay your debts over a 3-5 year period. This option is presented to your creditors by your credit counsellor and, if the offer is accepted, you make only one monthly payment to the credit counselling agency. This will not cancel or reduce your debts but may offer enough interest relief so you can solve your debt problems.

Debt Management

When it comes to dealing with your debts, the best option depends on your current situation. If you feel you are in over your head, one of the debt relief options above may be the best solution.

However, if you find you are just starting to lose control of your debts, you can easily manage them with the following tips:

  • Make a list of all of your debts: Include the total amounts, monthly payments, interest rates, and due dates. This will help you get a bigger picture of your debt situation so you can start paying off what you owe.
  • Create a budget and payment schedule: Look at how much you earn versus how much you spend so you can free up extra funds to pay on your debts. Also, set up a payment schedule based on when you get paid to ensure your payments are consistent.
  • Pay your bills on time: Late payments will make it harder for you to pay off your debt since you will constantly be playing catch-up on missed payments. Plus, you don’t want your current bills to end up becoming debts as well.
  • Pay the minimum payment each month: If you can’t afford to make large payments on your debts, focus on making the minimum payment. This won’t help you pay off the debts any sooner but it will help you avoid interest rate increase, late fees and the debt being sent to collections. 
  • Pay off your credit cards first: Credit cards tend to have the highest interest rates, so paying them off more quickly will help you save money you can then use to pay off your other debts.

Frederick & Company Limited is Here to Help!

Whether you are looking for debt relief or need help tackling your debts on your own, our team is dedicated to supporting you through the process. If you feel like your debts are impossible to manage, we can help you explore your options!

Contact us today for more information or to book your appointment.