What to consider
Creditor participation and interest relief vary. This is different from a loan.
Who can help?
Credit counselling organizations. This describes a provider type, not a confirmed DebtHelpers partner.
Questions to ask
- Which creditors will participate?
- What happens if I miss a payment?
- Which fees are one-time, recurring or already included in the quoted payment?
KNOW THE DIFFERENCE
Different options. Different conversations.
Start with how each works, who provides it and what to ask.
Consolidation loan
New borrowing used to pay existing balances.
- Who to speak with
- A lender or appropriately authorized broker
- A useful question
- What is the total repayment, including interest and fees?
Debt management plan
A voluntary repayment arrangement with participating creditors.
- Who to speak with
- A credit counselling organization
- A useful question
- Which creditors participate, and what fees apply?
Consumer proposal
A formal proposal to creditors under insolvency law.
- Who to speak with
- A Licensed Insolvency Trustee
- A useful question
- What are the costs, obligations and alternatives in my situation?
MAKE THE CONVERSATION COUNT
Three things to have handy
- 1Creditor names and balances
- 2Payments you can sustain after essentials
- 3Any missed payments or collection notices
Confirm which debts the plan would cover
A DMP is not new credit. You usually repay the included debt in full through a counsellor. Credit cards and unsecured loans may be included; mortgages and car loans usually are not. Ask which creditors accept, and keep paying accounts outside the plan.
Check the payments in a normal month
Original hypothetical example—not fees or a quote. Suppose $550 remains for debt payments after essentials. A $400 plan payment already includes its monthly fee. Another debt needs a separate $100 payment that is not already counted in essentials. The debt payments total $500 a month, leaving $50 in this example.
Then check the first month separately
Using the same example, suppose a separate $120 setup charge is also due in month one. That month’s debt outflow is $620, which is $70 more than the $550 available. Ask how one-time costs and due dates would be handled before signing. A positive ongoing remainder alone does not show that a plan fits your circumstances.
Keep written proof and ask about changes
Ask for regular written plan updates and payment receipts, then check that creditors receive payments on time. Before agreeing, ask what happens if income changes or a payment is missed. Missed payments may cause the plan to be cancelled.
Will every creditor agree?
Not necessarily. Participation is voluntary. Ask the counselling organization how it handles a creditor that declines and how that affects your overall repayment plan.
Does this request start a debt management plan?
No. It sends a contact request to DebtHelpers.ca, a lead-generation service. It does not enrol you, book a counsellor or apply for a loan. We’ll ask before sharing your details with a provider.
Check the source
Related options
Questions about your situation
- Debt settlement companies in Canada: what to check before paying
- Debt settlement vs consumer proposal in Canada
- Debt sent to collections in Canada: your first steps
- Consolidated Credit Canada review: counselling, not a consolidation loan
- Credit Canada vs Credit Counselling Society vs Consolidated Credit Canada
- Credit counselling in Canada: services, costs and questions
- Payday-loan debt help in Canada
- Debt consolidation vs a debt management plan in Canada