Debt Consolidation
Services in Canada
Eliminate most unsecured debts and get a fresh financial start.
Goth and Company eliminates overwhelming debt for Canadians through government-approved debt consolidation programs. As Licensed Insolvency Trustees, we are the only professionals legally authorized to file consumer proposals and bankruptcy in Canada – the most effective forms of debt consolidation to reduce what you owe.
Canadian Debt Consolidation
Debt consolidation in Canada is a process for combining debts into one payment which can help to eliminate or reorganize most unsecured debts faster. Once you begin with a government-regulated debt consolidation process, creditors must deal directly with your Licensed Insolvency Trustee instead of contacting you directly.
Filing for bankruptcy or filing a consumer proposal are the more popular debt consolidation options in Canada. Not all debt consolidation methods are equal and have their own process, which is why choosing the right Licensed Insolvency Trustee can make all the difference in your debt relief journey.
As Licensed Insolvency Trustees incorporated since 1993, Goth and Company takes a personal approach to understand your unique financial situation and guides you through every step. We review all of your debt consolidation options with you and ensure you understand how each approach will impact your life in Canada.
When you’re ready to take control of your financial future, you choose the path that makes the most sense for your situation. Goth and Company currently provides debt consolidation services such as bankruptcy or consumer proposals throughout Canada, having guided thousands of Canadians through successful debt elimination.
Who Should Consider Debt Consolidation Options in Canada?
Debt consolidation options are for individuals and families who struggle to manage multiple debt payments or want to reduce their total debt burden. Here are the top signs you should be discussing debt consolidation with a Licensed Insolvency Trustee:
- Making only minimum payments on multiple credit cards
- Using one credit card to pay another
- Avoid answering the phone afraid of harassing creditors
- Owe CRA back taxes for multiple years
- Wages garnished for unpaid bills
- Turned down multiple times for extended credit
- Repeatedly use cash advance or payday loans
- Skip payments or are behind on accounts
Debt Consolidation Options & Relief Services
Several debt consolidation alternatives exist in Canada. Traditional debt consolidation through bank loans reorganizes debt without reducing amounts owed, while Licensed Insolvency Trustees provide immediate creditor protection through federally regulated debt consolidation that actually eliminates debt.
Consumer Proposals
The most effective debt consolidation method that reduces your debts by up to 70% while allowing you to keep all your assets. This binding agreement consolidates all unsecured debts into a single affordable payment over a maximum 5-year term. Our consumer proposals get accepted at a rate of 99% or better.
Personal Bankruptcy
A legal process that eliminates most unsecured debts within 9-21 months. Bankruptcy consolidates all debt obligations through immediate discharge, providing the fastest path to debt freedom when other consolidation methods aren’t viable.
Traditional Bank Loan Options
Bank loans that combine multiple debts into a single payment. These require good credit and stable income but don’t reduce the total amount owed – you still pay 100% of your debt plus interest.
Get Your Free Debt Consolidation Consultation
Dealing with debt may seem overwhelming, but it becomes much easier once you take the first step to find out what options are available.
1
Provide some basic information
Answer a few questions to help us understand what you are dealing with.
2
Speak with a debt specialist
Review all of the available options with an experienced professional.
3
Choose an option
Pick the solution that works best for you and decide when you are ready to move forward.
What Happens During the Debt Consolidation Process
The debt consolidation process might seem overwhelming initially, but that is why we’re here to help. The process becomes much clearer once you understand what happens at each stage. Goth and Company has successfully helped thousands of Canadians like you consolidate and eliminate overwhelming debt.
1. Free Assessment and Review
We’ll review your debts, income, and assets during a confidential meeting. Our Licensed Insolvency Trustee explains all your debt consolidation options and helps determine which approach provides the best outcome for your situation.
2. Choose Your Debt Consolidation Method
When a form of debt consolidation is your best option, such as consumer proposal or bankruptcy, we handle all the paperwork and file with the federal government for consumer proposals or bankruptcy. For traditional consolidation, we help you understand qualification requirements and alternatives.
3. Begin Immediate Creditor Protection
Government-regulated debt consolidation starts immediately – no more collection calls, wage garnishments, or legal actions. We guide you through every requirement to ensure you complete your debt consolidation successfully.
Why Choose Goth & Company for Debt Consolidation
Goth and Company has maintained professional licensing and good standing with the Office of the Superintendent of Bankruptcy since 1993, demonstrating our commitment to ethical debt consolidation practices and client success throughout Canada. Our Licensed Insolvency Trustees help you understand your debt consolidation options and find the best path forward.
We understand exactly what creditors expect
- 99% consumer proposal acceptance rate.
- 30+ years of experience
- Federal licensing and regulation
- Transparent, regulated fees
- Comprehensive debt consolidation services
- Personal approach
Taking the first step is like a breath of fresh air
Each month, thousands of Canadians begin their journey towards debt consolidation relief. The initial meeting with a Licensed Insolvency Trustee is often described as a breath of fresh air. Knowing that you have debt consolidation options makes a world of difference.
Since 1993, Goth and Company has helped thousands of Canadians overcome debt and get a fresh start through effective debt consolidation programs.
Goth and Company delivers comprehensive debt consolidation services through federally regulated processes that some debt consolidation consultants simply cannot provide. The importance of choosing a Licensed Insolvency Trustees lies in our legal authority to bind creditors, reduce debt amounts, and provide immediate creditor protection.
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Frequently Asked Questions
Below are commonly asked questions about Debt Consolidation in Canada.
What Exactly Is Debt Consolidation and How Does It Work?
Debt consolidation combines multiple debts into a single manageable payment through various methods including consumer proposals, bankruptcy, or traditional bank loans. The mechanisms behind debt consolidation vary significantly based on the method chosen.
Consumer proposal consolidation works by filing legal documents with the federal government that immediately stop all creditor collection activities and create binding agreements for debt reduction. The process involves comprehensive debt assessment, creditor negotiation through Licensed Insolvency Trustees, legal filing that triggers creditor protection, creditor voting period (45 days), and implementation of reduced payment plan once accepted.
Traditional bank loan consolidation works by borrowing money to pay off existing debts, then repaying the bank with a single monthly payment. This method reorganizes debt without reducing the total amount owed.
The importance of understanding these differences lies in the fact that only Licensed Insolvency Trustees can provide debt consolidation that actually reduces what you owe while providing immediate legal protection from creditors.
What Debts Can Be Consolidated in Canada?
Most unsecured debts can be consolidated through consumer proposals, while traditional consolidation loans may have restrictions based on lender policies. The debts that can always be consolidated include credit card debt from all major banks and retailers, personal bank loans and lines of credit, payday loans and short-term lending, phone bills and utility arrears, medical and dental bills, and personal loans from family or friends.
The debts that are sometimes consolidated depending on circumstances include income tax debt to the CRA, student loans (if 7+ years since completion), business debts with personal guarantees, rental arrears and lease obligations, and professional service fees.
The debts that cannot be consolidated include mortgage payments, secured car loans, court fines and penalties, child or spousal support payments, recent student loans (under 7 years since completion), and secured debts where you want to keep the asset.
What Are the Risks and Limitations of Debt Consolidation Methods?
The risks include potential credit score impact and compliance requirements throughout the debt consolidation process. Consumer proposals result in R7 credit rating for 3 years after completion, while bankruptcy creates R9 rating for 6-7 years after discharge.
The limitations are that secured debts like mortgages and car loans continue unchanged, court fines cannot be eliminated, recent student loans survive most debt consolidation methods, and mandatory counseling sessions are required for government-regulated options. You must also complete monthly financial reporting for consumer proposals and follow payment schedules strictly.
However, these limitations are outweighed by benefits for most people struggling with overwhelming debt. Success factors include following payment schedules, attending required counseling, maintaining honest communication with your trustee, and avoiding new debt accumulation during the process.
When Should Someone Consider Debt Consolidation?
You should consider debt consolidation when warning signs appear that indicate your current debt management approach isn’t working. The timing indicators include making only minimum payments on multiple credit cards, using credit cards to pay other bills or debts, missing payments or consistently paying late, avoiding creditor phone calls, maxing out available credit limits, considering payday loans to make payments, and feeling overwhelmed by multiple payment due dates.
The best time for debt consolidation is before creditor legal action begins, while you still have some income to make payments, when stress from multiple debts affects your daily life, and when you realize current payment methods will take many years to eliminate debt.
You should seek immediate debt consolidation help when facing wage garnishment, bank account seizures, asset repossession threats, or imminent legal proceedings from creditors.
Who Qualifies for Debt Consolidation in Canada?
You qualify for debt consolidation when you have multiple unsecured debts totaling at least $1,000 and struggle to manage separate payments to different creditors. The qualification factors include debt-to-income ratio, number of creditors, payment difficulties, and stress from managing multiple obligations.
For consumer proposal consolidation, you must have less than $250,000 in unsecured debt (excluding mortgage) and ability to make some monthly payment toward your debts. You must also be a Canadian citizen or resident, or do business in Canada, or own property in Canada.
For traditional bank consolidation, you need good credit scores (typically 650+), stable employment, sufficient income to qualify for new financing, and often collateral such as home equity.
You should seek debt consolidation when warning signs appear including making only minimum credit card payments, using one credit card to pay another, avoiding creditor phone calls, having wages garnished, being denied credit repeatedly, relying on payday loans regularly, or consistently missing payments.
How Much Do Debt Consolidation Options Cost in Canada?
The costs are significantly different based on the consolidation method chosen. Consumer proposal costs are government regulated with administration fees included in your monthly payment to creditors (typically 20% of payments made), no upfront costs with all fees incorporated into payment plan, two mandatory counseling sessions included at no additional cost, and total cost of whatever you agree to pay creditors (30-70% of original debt).
Bank consolidation loan costs include interest rates of 6-25% annually depending on credit score and security, origination fees of 1-5% of loan amount, possible ongoing monthly administration fees, and total cost of 100% of original debt plus interest and fees.
Debt management plan costs include setup fees of $50-200 initial fee, monthly fees of $25-75 per month for plan administration, and total cost of 100% of original debt plus program fees.
How Long Does Debt Consolidation Take to Complete?
The timeline typically involves immediate relief starting within 24-48 hours of filing government-regulated debt consolidation documents, followed by different completion periods based on the method chosen.
Consumer proposals take 6 months to 5 years (you choose based on affordable payment), first bankruptcy takes 9 months (no surplus income) or 21 months (with surplus income), second bankruptcy takes 24-36 months depending on income, traditional bank loans take 2-7 years typically, and debt management plans take 3-5 years average.
The process phases involve initial assessment and option review (Week 1), choosing and preparing your solution (Week 2-3), and filing to begin creditor protection (Week 3-4). Immediate relief starts within 24-48 hours of filing your debt consolidation documents.
What Happens After Debt Consolidation is Completed?
After completing debt consolidation, you receive legal discharge documentation for consumer proposals or bankruptcy, or loan completion certificates for bank consolidation. The follow-up actions include obtaining secured credit card to rebuild credit, building emergency fund, following monthly budget, monitoring credit reports, and considering RRSP contributions (always protected from creditors).
Long-term planning involves establishing good credit habits, maintaining employment stability, avoiding future debt accumulation, and building financial literacy skills. For consumer proposals and bankruptcy, you can begin rebuilding credit immediately after completion through secured credit cards and consistent payment habits.
Most people find significant stress relief and improved cash flow management after completing debt consolidation, regardless of the method used.