Find a Licensed Insolvency Trustee
The Office of the Superintendent of Bankruptcy maintains the canonical list of every LIT licensed in Canada. First consultations are free and confidential.
OSB: Licensed Insolvency Trustee directory →Stage · Paying down debt in Canada
Pick the right path
Six paths, each suited to a different situation. The right one depends on total debt, interest rates, credit score, stability of income, and how quickly you need relief. Work through them in order of credit impact, cheapest to most damaging.
What to do this week
- Decide on DIY first. If you have stable income, decent credit (680+), and can pay in 2–3 years, avalanche or snowball usually beats formal options.
- If DIY won't work: price a consolidation loan from your bank and one credit union. Compare rate to your current weighted average.
- If consolidation isn't available or won't help: book a free first consultation with a non-profit credit counsellor AND a Licensed Insolvency Trustee. Both should quote free. Compare recommendations before signing anything.
What to avoid
- 'Debt settlement' firms that charge upfront fees and are not Licensed Insolvency Trustees. Most cannot legally do what they advertise.
- Using home equity to pay unsecured debt without a firm plan. You are converting dischargeable debt into secured debt on your home.
- Signing paperwork at the first meeting. Sleep on every formal option at least 48 hours.
Calculators for this stage
Forms to file at this stage
Find a non-profit credit counsellor
Credit Counselling Canada lists its accredited member agencies. Members are non-profit, provide free initial consultations, and do not charge upfront fees.
Credit Counselling Canada →Frequently asked
What's the difference between a consumer proposal and bankruptcy?
A consumer proposal is a legally binding offer to creditors to repay a portion of what you owe over up to 5 years. You keep your assets. Bankruptcy is the surrender of non-exempt assets in exchange for discharge of most unsecured debt, typically 9–21 months for a first-time bankruptcy. Proposals have less credit impact; bankruptcy has more.
Who qualifies for a consumer proposal?
You must owe up to $250,000 excluding any mortgage on your principal residence, be insolvent, and be able to afford the monthly payment you propose. The proposal must offer creditors more than they would get if you went bankrupt.
Can I keep my house in a consumer proposal?
Yes. A consumer proposal does not require you to sell your home or other assets. You must continue paying your mortgage. This is the main reason homeowners choose proposals over bankruptcy.
Will my employer know if I file a consumer proposal or bankruptcy?
Not automatically. Your employer is only notified if a wage garnishment is already in place (proposals and bankruptcy immediately stop garnishments) or if you hold a licensed professional role where your licensing body requires disclosure.
Next stage
Execute the payoff →