Debt Management Solutions

Need help dealing with your debts? There are a number of different debt management solutions available when faced with financial difficulties, depending on your situation.  Bankruptcy or ignoring your debts are not the only options.  Our Money Mentor debt counselors can help you identify the solutions that might work best for you.  We are the exclusive provider of the Orderly Payment of Debts Program in Alberta which is the only debt repayment program that offers court-ordered creditor protection at a reduced interest rate.

Not sure of all your debts or how much you owe?  The first thing to do is contact a credit bureau to get your credit report:

Equifax Canada
Trans Union

 
Is the information in your file correct?  If not, go to the Service Alberta website to find out more about credit reports and how to correct your information.

Strategies for Dealing With Debt

There are a number of ways you can reduce your debt load depending, of course, on your financial situation and if you expect it to improve right away or not for awhile.

Check out the options below and consider which one will work for you in the short term and the long term.

1.  Reconsider your Budget

Do you have any expenses that you can decrease to free up some extra cash to maintain your montly credit payments or put extra payments down?  Can you take the bus instead of driving?  Cut back on eating out?

2.  Refinance Loans or Mortgage

Look into extending the length of time you have to pay on loans or mortgages.  It may cost you more in interest but it will reduce the monthly payment required.

3.  Consolidate Loans or Mortgage

Consider a consolidation loan which brings all of your debts under one loan so you only have to make one payment.  Be sure that the loan has a low interest rate.  Remember not to continue to incur more debt!  It defeats the purpose.  For more information, go to the Financial Consumer Agency of Canada website.

4.  Borrow from Family or Friends

Can a friend or family member lend you the money?  This way you can make payments to your family lender at a more flexible payment schedule and at a lower or no interest.

5.  Lump Sum Payment

Expecting a large lump sum of money?  Talk to your creditors to see if they will take a lump sum payment.  If they do, be sure to get a final agreement in writing that states that you have settled for a final payment.

6.  Negotiate with Creditors

Occasionally, creditors will set up a different payment schedule for you to make your payments more manageable.  You make lower payments over a longer period of time.  If you are able to negotiate this with the creditor, be sure to get the agreement in writing.  For more information regarding what creditors can and cannot do, visit the Service Alberta website.

7.  Orderly Payment of Debts program (OPD)

The OPD program is exclusively available to Alberta residents through Money Mentors.  It is designed to help you pay off your unsecured debts at a reduced rate of 5% and it provides protection from legal action such as garnishees.

If you feel that the OPD program is a right fit for you, take the self-assessment to find out if you can make the minimum payments.

8.  Consumer Proposal

Consumer Proposals under the Bankruptcy and Insovency Act would require payment toward your unsecured debts, but no the full payment amount.  For more information, go to the Office of the Superintendent of Bankruptcy Canada website.

9.  Bankruptcy

Bankruptcy offers an option to relieve your debt crisis if the other options will not work for you.  For more information, go to the Office of the Superintendent of Bankruptcy Canada website.

For more information on each of these options, view our online tutorial under the Learning Centre in this website.