Debt Relief Programs in Canada

Credit cards are a highly useful luxury in life until the credit card debt gets too high. If that is your situation, you are probably looking for suitable debt relief solutions in Canada or bad credit loans. Keep on reading to find out our advice on high debt credit cards.


Helping yourself

Debt relief means that you are going to try to negotiate with the credit card company to lower the interest rates. Even if they bring the interest down by a few percents, you end up saving a lot of money on your overall debt. This also means that you will have to make fewer payments to get rid of your entire debt.

Sometimes, this negotiation brings the best outcomes if there is a one on one meeting between the company and the client.  You can present your case, the company can listen to you and by the end, and you can avail some benefits without having to pay a third party.

However, this ‘help yourself’ technique only works if you have a low balance and your payment history is great. If this is the situation, you present yourself as an ideal client who is in a bad situation so the company does not refuse to help. If you are going to go solo, the tip is to use an already existing script that you can easily find on the internet. This will help you sound professional in case some questions catch you off guard.


Hire an agency

If you have a credit card with a high balance and a payment history that does not really side with you either, it is best to hire professional help. As soon as you realize that keeping up with minimum payments is an issue, get help. The sooner you do it, the better. In the beginning stages, you have more options. In any case, your creditor needs to be contacted and it is best if a professional takes this step. This is because an expert will have more expertise on how to get the creditor to negotiate.

Here are the types of debt relief programs you can consider in Canada.

Debt Repayment Plan

This is also referred to as the debt management program (DMP). The aim with this is to get to an agreement that there will be only consolidated payment with no or very less interest. What is done is that all unpaid debts are combined together into one big payment. Most people opt for this when the entire amount of the debt is within their budget. This way they do not have to consider a consolidation loan to pay their old debts back. The work of the agency here is to help you create a budget that will allow you to pay this amount within a 5-year period. The agency will meet up with the creditor to ensure a negotiation will fit into the revised budget.

Orderly Payment of Debt program

Residents of Alberta and Nova Scotia can utilize the OPD. If you are from another province, you do not have to feel deprived. The reason why this program is not offered in other provinces is that the agencies there will most likely manage to get your debt sorted through the first procedure. As for the OPD, this program offers 5% interest rate. The total amount has to be paid within a 3-year period. The full amount has to be paid and then you can keep your assets secure. You will need an approval from the creditor as well as the court to go on with the OPD.

Debt Settlement program

Debt settlement is a process in which the creditor is paid a sum of money in order to clear some of the actual debt. The creditor will remove some of the debt payments from your history so that you only have to pay a smaller amount than what you actually owed. If you believe you own an asset that you can sell to pay off a part of your debts, this is the right decision for you. The issue in this process is that you need to be very cautious of the agency you choose. Do your thorough researches, make sure there are no complaints filed against the agency, and only then proceed with the contract.

Debt Relief for Insolvency

In case the situation is very out of hands, you are going to need some legal help. There are two further options in this scenario: consumer proposal and bankruptcy.

When you and the creditor negotiate to come to the agreement upon certain terms, it is called a consumer proposal. You are supposed to pay back the agreed amount in no more than 5 years. Bankruptcy, on the other hand, is when you are out of options. Without any assets or any agreements, you become insolvent.