Debt counselling

Debt relief options

Know your choices to develop your plan

What are my debt relief options?

You may have come across a variety of options while looking for ways to help you with debt. With so many solutions to choose from, it can be hard to know which one is right for you. To help you learn more about your options, we’ve provided an overview of the following debt relief methods and how they can apply to you.

Do-it-yourself debt control

You might be interested to learn more about how you can pay down your debt on your own before seeking professional advice. “Do-it-yourself” options can include selling off some assets to pay off your debt, restructuring your household budget to allocate more money to debt reduction or speaking with your financial institution about consolidating your debts.


You can create a household budget for you and your family to follow and manage monthly expenses. A budget will also show you how much you could potentially set aside to apply to your savings account or to pay down your debt. Learn more about why you need a budget.

Debt consolidation loan

A debt consolidation loan is used to combine and pay off multiple loans through one payment at a lower interest rate. For example, you may have debt on three credit cards at 18% interest. With a consolidation loan, you can combine these debts into one payment with a line of credit at 11% interest allowing you to redirect the saved interest costs to paying down your debt faster. Learn more about a debt consolidation loan.

Formal debt control

Credit counselling

A credit counselling agency provides a range of services to help those who are having a hard time managing their money and handling their debt. They can assist you with your budget planning and can offer Debt Management Plans (DMPs). Read more about DMPs and how they differ from a consumer proposal. While there are many excellent not-for-profit credit counselling agencies (and BDO can refer you to trusted sources), it is important to distinguish between these and other ‘debt settlement’ companies that follow a different business model. 

Debt management plan (DMP)

A debt management plan or debt management program (DMP) is a voluntary agreement between you and your creditors to reduce your debt payments. This is typically conducted through a credit counselling agency. The credit counsellor will negotiate with your creditors to agree to reduce the interest on your debts. DMPs do not offer the same level of protection as a consumer proposal and you have to pay back 100% of what you owe. Learn more about the consumer proposal process.

Debt settlement plan

Unlike a DMP with a not-for-profit credit counsellor, a debt settlement plan involves a debt settlement company negotiating with your creditors several months after you have signed their contract. You will not be making any principal or interest payments to your creditors. Instead, you will be making monthly payments to the debt settlement company to build up a lump sum payment in a holding account, which can take several months. Once the company feels it has enough money built up in the account, it will start contacting your creditors to try and settle each of your debts for less than what you owe.

Consolidation orders and voluntary deposits

If you are worried about a wage garnishment or seizure of property and you reside in Alberta, Nova Scotia or Quebec, you can go to your local court house to register for a consolidation order or, as it is known in Quebec, a voluntary deposit, to help you make your debt payments. Learn more about consolidation orders and voluntary deposits.

Consumer proposal

A consumer proposal is a proposal made between you and your creditors that usually has you repaying only a portion of the debt you owe, instead of the full amount making it different from a DMP. It protects you from harassing phone calls from creditors and immediately stops all legal action taken against you like a lien on your home or a wage garnishment. Only a Licensed Insolvency Trustee, as an Officer of the Court, can administer this legitimate debt solution to protect you. To learn more about the consumer proposal process, visit our consumer proposal page.


Bankruptcy releases you from the majority, if not all of your debts, which means you will not have to pay them back. Like a consumer proposal, bankruptcy also immediately stops all legal action against you and can only be administered by a Licensed Insolvency Trustee. Despite some peoples’ belief, you do not ‘lose everything’ if you declare bankruptcy and for some people’s situation it is actually the most efficient debt solution for regaining financial stability. Bankruptcy is only considered, however, after we explore all your other options first. Learn more about the bankruptcy process.