Living with debt can be incredibly stressful. Whether your financial troubles stem from job loss, unexpected expenses, or overspending, the impact can feel overwhelming. Calls from creditors, mounting interest, and a constant feeling of anxiety are all signs that it’s time to take action. The good news is you’re not alone, and there are steps you can take to regain control of your finances.
Debt relief comes in many forms, and the right solution depends on your unique situation. The first step is to get a clear picture of your financial health. Start by listing all your debts, including the total amount you owe, the interest rates, and the minimum monthly payments. Understanding exactly what you owe will help you evaluate your options. From there, you can consider everything from budgeting and debt consolidation to professional help through a Licensed Insolvency Trustee (LIT).
A household budget is your most powerful tool when facing a debt problem. Create a detailed monthly budget that accounts for income, essential expenses, and minimum debt payments. See where you can cut back to free up money for debt repayment. Small sacrifices, like dining out less or pausing streaming services, can make a real difference over time. Every dollar saved is a dollar you can put toward reducing what you owe.
If your debt feels manageable but you’re struggling with high-interest credit cards, a debt consolidation loan might help. This type of loan rolls your various debts into a single payment, ideally with a lower interest rate. Keep in mind, though, that you’ll need a decent credit score to qualify, and it won’t solve deeper financial issues if your expenses still outpace your income.
When debts are unmanageable, it’s time to speak with a Licensed Insolvency Trustee. As federally regulated professionals, LITs are the only ones in Canada authorized to file a consumer proposal or a bankruptcy. A consumer proposal is a legal process that allows you to settle your debts for less than you owe, while avoiding bankruptcy. It stops collection calls and wage garnishments, and gives you a structured path to becoming debt-free, usually over five years or less.
Filing for bankruptcy may sound intimidating, but for some, it’s the fastest and most effective way to hit the reset button. It clears most unsecured debts and gives you a fresh start, though it does have longer-lasting effects on your credit. An LIT will walk you through your options and help you choose what makes the most sense based on your income, assets, and level of debt.
Taking action early is key. The longer you wait, the fewer options you may have. Falling behind on payments can damage your credit, increase interest charges, and even lead to legal action. Getting advice as soon as you notice you’re in over your head can save you stress—and money.
Lastly, don’t feel ashamed about having a debt problem. Life happens, and millions of Canadians face financial struggles at some point. What matters most is what you do next. With the right support and a clear plan, you can move forward with confidence and rebuild your financial future.
If you’re not sure where to begin, start with a free, no-obligation consultation with a Licensed Insolvency Trustee at Hoyes, Michalos & Associates. We’ll review your financial situation, explain your debt relief options in plain language, and help you take the first step toward lasting financial freedom.