What will it cost?
Check what you may pay now and over time.
Read the full details
First separate borrowing from an insolvency process
FCAC describes consolidation as combining debts through products such as a loan or line of credit. The OSB describes a consumer proposal as a formal arrangement administered by an LIT. The shared idea of one payment does not make the eligibility, credit consequences or legal process interchangeable.
| Question | Consolidation loan | Consumer proposal |
|---|---|---|
| Who handles it? | The lender or authorized borrowing intermediary | A Licensed Insolvency Trustee |
| Is there new borrowing? | Yes | Not a replacement loan |
| What sets the payment? | The lending agreement | The proposal terms and formal process |
| What needs individual review? | Approval, total cost and security | Eligibility, debts, assets, terms and consequences |
What will it cost?
Check what you may pay now and over time.
Read the full details
For a loan, compare full cost and sustainability
Prepare a list of the balances to be paid and obtain quotes for a realistic repayment period. Ask whether the payment is lower because of a better rate or because repayment has been stretched out. If the new borrowing is secured, identify the asset at risk. A lender willing to advance money has not necessarily resolved the pattern that created the original balances.
What should you ask?
See what to have ready and what to ask.
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For a proposal, ask an LIT what applies to you
An LIT needs to assess your actual circumstances and explain the available options. Do not assume that a website’s debt amount bracket proves eligibility or establishes how much you would repay. Ask which debts are included, how assets and joint obligations are treated, and what happens if the proposed payments become difficult.
Who should you ask?
See what to have ready and what to ask.
Read the full details
Bring the same facts to both conversations
Use the same debt list, income picture and essential expenses so you are not comparing answers based on different information. Record the assumptions behind any quoted payment. Do not stop creditor payments or assume collection protection merely because you completed an enquiry. A formal filing and a contact request are different events.
What to have ready
- A complete debt list, including secured and joint debts.
- Reliable income and essential expenses.
- The total repayment and assumptions for each option.
- The professional’s explanation of credit and legal consequences.
You do not need account numbers, your SIN, bank passwords, or files to start.
Should I apply for a loan before speaking to an LIT?
There is no universal sequence. You can ask questions about your options before committing to borrowing or a formal proceeding. If payments are already unsustainable, make that clear in the assessment.