What are my debt-relief choices?

March 1, 2012 by
Filed under: Bank's Profits, Bankruptcy, Debt Management, debt relief 

Below are some of the debt-relief choices that are available to you. While we cater to Vancouver Island and the Greater Victoria area, this information is applicable Canada-side. We do strongly recommend that you consult and independent debt counsellor for debt-relief advice, be it through this website or elsewhere, to get the information that best applies to you.


  • Do represent themselves.
  • Do want you to take yet another (consolidation) loan.
  • Don’t reduce your debt. You will repay 100% of your loans, plus interest.
  • Don’t want you to consider government options (bankruptcy or consumer proposals).

A bank-sponsored solution will not adversely impact your credit rating.

Credit Counselling

  • Do act primarily in the interest of the wealthy lender, not the struggling borrower. The Financial Consumer Agency of Canada (FCAC) advises Canadians to do their homework about credit counselling services before entering into an agreement. Shop around and compare services and fee structures of both for-profit and not-for-profit.
  • Don’t want you to consider government options (bankruptcy or consumer proposals).
  • Don’t reduce the principle of your debt but might be able to get a lower interest rate.

A credit counselling solution will impact your credit rating (an R7 will appear on your report for up to three years).

Bankruptcy trustees

  • Do provide an initial no-charge consultation.
  • Do represent the government, the lenders, and you. If it sounds watered down, it is.
  • Do want you to consider government options (consumer proposals and bankruptcies).
  • Do push for a consumer proposal (they earn a percentage of what they wring out of you).
  • Do halt wage garnishments and harassing phone calls once you have filed.
  • Do reduce your debt by anywhere from 100% (bankruptcy) to 50% (consumer proposal). Results vary depending on your situation.

Any government solution, which MUST be administered by a trustee, will adversely impact your credit rating (R7 or R9 for three or more years).

Debt-negotiation companies

  • Do represent American (not Canadian) companies. Be aware! Many of these companies are American!
  • Do demand you pay upfront based on the percentage of your debt, regardless of their results.
  • Do reduce your debts, depending on your situation and their skills.
  • Do not guarantee results. They may or may not deliver what they promise.

Debt negotiations will adversely impact your credit rating.

Independent Credit Counsellors

  • Do provide an initial no-charge consultation.
  • Do charge a fee for ongoing support.
  • Do present you with ALL your options.
  • Do NOT pressure you to make a particular choice.
  • Do NOT have a financial vested interest in what course of action you choose.
  • Do NOT judge you. Our independent credit counsellors are certified AND experienced. They understand.
  • Do help you navigate your priorities (credit rating or debt reduction) and the process, from beginning to end.
  • Do help you re-establish your credit.

Please know this: Your Credit Rating and FICO score are NOT the definitive financial terms that defines you. Contrary to what banks would have you believe, it’s okay, you can recover from a low credit rating. You can rebuild it. And once you understand how money works, you’ll quickly enough figure out that you can re-apply for a credit card or loan soon enough. Bankrupt or not, every human being is a potential money-maker for the banks.

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