When you find yourself struggling with debt, it is hard to know which way to turn for help.  The internet is full of advice on debt relief options – some are good some are bad.  The question is – how do you know which is good.  Unfortunately, there are many companies that claim to be debt relief experts.  These companies are not regulated in any way. They often cause more harm than good.  It is important to speak to a licensed professional about your options.  A Licensed Insolvency Trustee is licensed and regulated by the federal government and will help you look at all your options for debt relief.

Consolidation Loan

A consolidation loan is a loan from a bank to put all of your debt together into one payment.  This debt relief option works well for individuals who can afford to pay their debt but need to the payments consolidated into one loan with a good interest rate.  This option will not adversely affect your credit rating.  A consolidation loan does not reduce the debt, just puts it into one payment.  The key to success with this option is closing the accounts you are consolidating, otherwise you would end up using those accounts again and find yourself in even more debt.

Refinance Assets

If you have equity in your home, refinancing it may be an option to pay off your debt.  Having your credit in good standing is key to this being a viable option.  There are limits to how much equity you can access doing this.  The government restricts refinancing to 80% of the value of your home.  This option does not adversely affect your credit and your payments would be lower and be incurring less interest.

Debt Settlement

You can try to negotiate a settlement directly with your creditors. You can do this yourself.  There are also debt settlement companies.  These companies are unlicensed and typically charge high fees and there are no guarantees.  The usually have you pay them monthly until they have a lump sum of money and then they contact creditors to see if they will settle.  This will adversely affect your credit for 6 years from the settlement.

Debt Management Program/ Credit Counselling Companies

Debt Management Programs are offered by unlicensed credit counselling firms.  They present an offer to creditors for you to pay your debt off over a three to five year period.  This is not a reduction of debt and there is a monthly fee charge by the company.  You pay your debt back in full.  Creditor participation is voluntary.  If creditors do not wish to participate they are allowed to continue collection activities.  CRA does not participate in Debt Management Programs.  This debt relief option does affect your credit. It reports on your credit for 2 years after you finish your payments.   DMP’s -with a reputable firm – do have their place and can be a viable solution in certain situations.

Consumer Proposal

consumer proposal is a debt relief option that is legal agreement between you and your creditors for a reduction of interest and reduction of debt.  The amount is unique to each situation.   All of your creditors are bound by the consumer proposal if over 50% accept it.  Participation is not voluntary.  Unsecured creditors are not permitted to contact you during a consumer proposal.  Only a Licensed Insolvency Trustee (LIT) can file and be the Administrator of a consumer proposal. A consumer proposal shows on your credit report for 3 years from the completion of the proposal.


Bankruptcy is another option that is a legal process that can only be done by a Licensed Insolvency Trustee.  It is the last debt relief option that we consider.  Most unsecured debts are released by bankruptcy, but there are a few exceptions the LIT would discuss with you if applicable. Despite the common misconception, you do not lose everything when you file an assignment in bankruptcy.  The process is meant to give honest, but unfortunate debtors a fresh start free of the crushing burden of debt.  Bankruptcy does affect your credit rating for 7 years – but you can start to re-establish after your discharge (9 months for a first-time bankruptcy).

At Golding and Associates we review your situation and all your options with you.  Not every debt relief option is the right solution for everyone.  As a federally licensed LIT we are professionals you can trust to help you understand all your options at this difficult time in your life. Call (902-365-3032) or email us with any questions or to schedule a free consultation.