How To Get Out Of Debt – Debt Relief Options In Ontario

Discovering how to get out of debt can be tricky, particularly if you have large amounts of high-interest debt and are living paycheck to paycheck. That’s because the cycle of debt doesn’t stop if you keep living on credit. Your outstanding balances will just keep building up and it can seem like you will never be able to pay off the amounts owed in your lifetime.

However, it’s important to know that there are many strategies you can use to manage debt.

It can take a few DIY strategies for some, like the snowball method or the avalanche method to get rid of the debt. For others, it may mean changing spending habits, learning how to create a budget and knowing where to find expert help when debt is out of control and you cannot manage it on your own. It may seem overwhelming when there is no solution in sight, but with the right debt relief strategy coupled with hard work and the necessary commitment, it is possible for anyone to completely get rid of debt in their life and become debt-free.


While there are many options to deal with debt, finding the right solution can be hard. There is no one-size-fits-all solution that can work for everyone, and it’s important to understand what the consequences of each might be. Keep in mind that each person’s financial situation is unique, and your circumstances are different from others so a solution that works for one person may not work as well for you.

Finding a debt relief program that is safe and which can save you the most each month

is a process – and this is where we can help. At Richard Killen & Associates we help you go through each step of the process starting with a debt assessment where we carefully look at your income, assets, amount of liabilities and monthly expenses.

Next, we can help you determine how much you can afford to repay and find ways to structure debt so you don’t have to pay the total amount. We can look into helping you save money in the process and not lose any, or all, of your valuable assets if possible. Depending on what you need based on your own unique financial circumstances, we can negotiate with your creditors on your behalf and ask to lower interest rates, waive penalties and fees and either work out a repayment plan to extend repayment terms another year or two or we ask for a legally binding settlement offer to dramatically reduce the amount you owe to a level you can afford to repay.

Moreover, as we are Officers of the Court, governed by the Office of the Superintendent of Bankruptcy Canada (OSB), we can guarantee that we will find the best program that is a win-win agreement for both sides. You, as the borrower, get the relief you need in repaying your monies owed and your creditors get fair payment for what they’re owed. To complete the process, we will also look to cure the underlying issues that have caused your financial problems and provide counseling and resources to guard against recurrence to enable you to avoid the mistakes that could make the problem happen again.


Relief to get out of debt could either involve less severe methods such as getting changes in your interest rate or payment schedule to lower your payments, or you may need debt forgiveness as opposed to a repayment plan, or it could be that you need more drastic measures such as wiping the debt out altogether in bankruptcy.

We recommend that you seek help as soon as you are experiencing these symptoms:

  • You’re skipping or have stopped making the monthly minimum payment on your bills.
  • You’re dependent on credit and are borrowing each month and your outstanding balances keep increasing.
  • You’re borrowing from payday loan companies and high-interest credit cards and your existing payments are costing too much.
  • You realize that you are not able to repay most of your unsecured debt (credit cards, medical bills, personal loans) within five years, even if you budget and cut spending.
  • Your unpaid unsecured debt total is nearly half or even more than your gross income.

Let’s look at your options for getting out of debt in Canada:

Debt consolidation loans

A consolidation loan combines all of your debts into one larger loan, with one monthly payment. We recommend taking out a loan through a bank or financial institution rather than consolidate using a line of credit or home equity line of credit. A loan has a set monthly payment and a fixed date for it to be paid in full, so there is more structure to organize your payments consistently. With a line of credit, the minimum monthly payment drops as the balance decreases, which can tempt you to lower your original monthly payment instead of maintaining it. Lowering your monthly payments will take you a longer period of time to repay the amount in full and you’ll also end up paying more interest. Ideally, the consolidation loan would have a lower overall interest rate and would allow you to make a lower monthly payment than what you are currently paying on all your existing payments.

Credit counseling and debt management

With a debt management plan (DMP), you can pay most of your unsecured debts at a reduced interest rate or with fees waived. This repayment plan is arranged between you and your creditors with the assistance of a credit counselling agency. We recommend working with an agency that is registered with the government as a non-profit organization as most of their credit counselors are licensed and accredited. A DMP works particularly if you have high-interest debts from multiple credit cards. Most credit counseling agencies have long standing relationships with many credit card companies and they have agreements in place to help clients get out of debt and even to rebuild credit worthiness so there is a high chance that most of your creditors will voluntarily participate in the program. A DMP will not work if you have a student loan, taxes owed or a payday loan.

Government Debt Relief Programs

Consumer Proposal

Consumer proposals are governed by federal legislation under the Bankruptcy and Insolvency Act. It is the only debt relief program in Canada that offers debt forgiveness as it can dramatically reduce the total amount of debt you will have to repay. Reductions for up to 80% are not uncommon in most successful negotiations. A licensed insolvency trustee will help you determine an affordable monthly payment as an offer to your creditors. Once creditors accept your offer, the arrangement becomes legally binding until the end of the fixed period which by law may be up to 60 months long.


Bankruptcy is also governed by federal legislation by the Bankruptcy and Insolvency Act. It is usually the last option to consider when all other alternatives have been explored. Debts included in the bankruptcy are discharged once all conditions are met which can take 9 to 21 months to complete, after which you get a fresh financial start.


The financial impact of COVID-19 has left many Canadians shaken. Ongoing layoffs and reduced incomes have left many staggering on how to manage essential expenses and how to continue in their debt repayment. If your debt situation worries you, the good news is there are several very good options available for getting out from under.

From consolidation loans to consumer proposals, these programs have been used by millions of Canadians, and although they are proven to work effectively to pay down debt and even get rid of it altogether, there really isn’t any one best way that will work for everyone. The best way for you will depend on your own unique financial circumstances.

Contact Richard Killen & Associates now and speak to a local Licensed Insolvency Trustee and we can help you explore all your options and give you unbiased advice on how to get out of debt and keep your debt under control.

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    About Richard Killen & Associates

    Since 1992, Richard Killen & Associates, a Licensed Insolvency Trustee, have helped thousands of people resolve their financial problems. With 25 years experience in this industry, our president, Richard Killen, and the rest of our team understand the difficulties that honest people can sometimes find themselves in. This expertise makes it possible to provide you with a service that effectively deals with the issues.

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    "Serving the GTA for 25 years."