Debt Relief Canada & Debt Elimination Solutions
Options, Services & Programs in Canada
Credit card debt reduction and how to get out of debt: Settling what you owe, debt management, debt forgiveness letter, debt consolidation load, consumer proposal, and more.
Do you want debt relief in Canada and solutions that work? Some ads make it sound easy, but finding the right solution is a process – and we can help. In Canada there are many options to deal with debt.
It can be hard to choose from the wide selection of debt relief services and solutions to find the one that’s right one for you.
You may have questions like: Which debt settlement companies can I trust? What is the best debt relief program for me? What is a licensed insolvency trustee? It’s important to do your research, find online reviews or ask a trusted non-profit credit counselling organization for help.
Government Debt Relief Programs
Designed to help individuals and businesses who are facing problems with their outstanding debts, the government debt relief programs help you manage your finances and pay off outstanding debts. There are many different types of government debt relief programs.
Debt Consolidation: It is the process of consolidating your debts into one big loan with a lower interest rate. Also, it simplifies the repayment process. The Canadian government offers debt consolidation loans through different institutions to help debt-ridden individuals and businesses.
Debt Settlement: It is about negotiating with creditors to reduce the amount of debt you owe them. Although the government doesn’t directly provide such programmes, it regulates the industry with provincial and consumer protection laws.
Debt Management Plan: It is offered by a non-profit credit counselling agency like ours, the Credit Counseling Society. You work with a counsellor to negotiate with the creditor to seek favourable circumstances for loan repayment.
Consumer Proposal: This program helps you avoid bankruptcy by negotiating with creditors on different terms than the original ones.
Bankruptcy: It helps you get a fresh start when you are unable to pay off your debts. You surrender your non-exempt assets to a trustee who sells them and distributes the amount to your creditors.
Debt Forgiveness: It refers to a partial or total reduction of debts when an individual or business can not pay off their debts.
What is Debt Forgiveness?
Debt Forgiveness is a partial or complete reduction in your debts. It helps you improve your financial situation and avoid bankruptcy when you are struggling with debt. It is a complex process with certain limitations.
It can happen with different types of loans, like credit cards, student loans, taxes, or mortgages. Debt forgiveness comes with implications, credit damage, and eligibility requirements. It works differently depending on the type of debt you have. For example, if you have credit card debt and can’t pay credit card debt, the issuer can sell the debt to a collection agency, and the agency might be interested in settling the debt at a lower amount.
With debt forgiveness, you can save money by paying a lower amount than what you were supposed to pay. It also makes getting rid of debt much faster and avoids further interest charges and fees. It helps in reducing the stress that comes with outstanding debt, and it also helps in improving your cash flow. Although, it does have a negative impact on your credit score. So, it highly depends on an individual whether it is the right approach.
Your Options for Debt Forgiveness in Canada
When you are fed up with collection calls and overbearing debt, debt forgiveness may seem like the perfect solution. There are no official government-backed debt forgiveness programmes in Canada. Although, there are two legally binding debt solutions for debt forgiveness.
The first one is bankruptcy, which is the most drastic option in Canada. It involves surrendering all your exempt assets to a Licensed Insolvency Trustee. The LIT will sell the asset and use the proceeds to pay off lenders. It has serious consequences on your credit score and borrowing credibility. The second option is the consumer proposal, which is a less severe option for debt forgiveness in Canada. It is about making an offer to your lenders to pay only a portion of the debt amount, thus forgiving the remaining debt. It entirely depends on the creditor whether it accepts the proposal or not. It prevents you from losing your assets or filing for bankruptcy. Getting debt forgiveness is not easy, but there are also alternatives to it, like debt management plans and debt consolidation loans.