Debt Consolidation Program

Are you dealing with debt and need relief? They say that a debt-free life is a stress-free life, and at Credit Canada, we believe those are words to live by. Whatever your debt problem may be, our certified Credit Counsellors will work with you to find the best debt relief solution that provides you with hope and peace of mind.

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What Is Debt Consolidation?

Consolidating your debt is the process of combining two or more debts into one. Some people choose a credit card balance transfer, a debt consolidation loan, or a home equity loan, but these often require good credit or high income. Some can actually dig you deeper into a financial hole. One option for providing debt relief for Canadians that genuinely works is a Debt Consolidation Program.

What Is a Debt Consolidation Program?

A Debt Consolidation Program (DCP) is an arrangement made between your creditors and a non-profit credit counselling agency. Working with a reputable, non-profit credit counselling agency means a certified Credit Counsellor will negotiate with your creditors on your behalf to drop the interest on your unsecured debts, while also rounding up all your unsecured debts into a single, lower monthly payment. In Canada’s provinces, such as Ontario, these debt payment programs lead to faster debt relief!

Advantages of a Debt Consolidation Program in Ontario, Canada

If you choose a debt consolidation service as part of your debt management plan in Ontario, it takes care of your unsecured debt. This includes credit cards, payday loans, unsecured lines of credit, and other unsecured loans. It’s a simple, straightforward solution for debt relief with big benefits, such as:

  • Avoiding insolvency, including bankruptcy or a consumer proposal, which can severely limit your financial future.
  • One lower monthly payment you can afford, and consolidated debt that can typically be paid off within 24 to 48 months. 
  • Stopping or dramatically reducing the interest rate on your unsecured debts, saving you hundreds if not thousands of dollars over time.
  • No more collection calls – you’ll no longer have to fear your phone!
  • Timely, automatic payments to creditors, with full tracking.
  • A certified Credit Counsellor who negotiates with your creditors on your behalf.
  • Simple, monthly fund transfers by telephone banking, debit card, or money order.
  • A set completion date (otherwise known as a light at the end of the debt tunnel!).
  • Free debt management tools and advice.
  • A secured credit card while on the Program, and an unsecured credit card once you've successfully completed the Program*.
*Some conditions may apply based on the status of your debt management program

Take command of your money through a positive attitude and powerful tools!

How to Set Up Your Debt Management Plan for Success

A DCP with Credit Canada also includes having a certified Credit Counsellor on your side, who’s like a friend who just happens to be a financial expert! Together, you’ll explore your attitudes about money while you learn simple money management skills that can last a lifetime. You'll discover how to:

1. Build a personal monthly budget and stick to it.

Creating a monthly budget can be one of the most important parts of a debt management plan. This budget can help you track and control your monthly expenses so you can work towards other financial goals – such as getting out of debt!

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Here’s a quick list of steps for building a personal budget:

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  • Sort Your Necessary and Unnecessary Expenses. When money is tight, it might be necessary to make some major cuts to your spending. Identifying which expenses are “necessary” and which ones are “unnecessary” can help you prioritize properly. What constitutes a “necessary” expense? Things that cover your most basic needs (food, shelter, utilities, etc.) and ability to work (car, work clothes, etc.) are generally considered necessities. Meanwhile, things you can do without or use purely to kill time can be sorted into the “unnecessary” column.
  • Eliminate Unnecessary Expenses. After sorting your expenses by necessity, start making cuts to unnecessary expenses. This could include doing things like quitting smoking or refraining from drinking alcohol, skipping on buying new clothes if the old ones still fit, or cutting back on games or other leisure activities. You’d be surprised how much cutting down on these expenses can save you! Of course, you don’t have to lead a completely Spartan lifestyle. You may find that you have some room in your budget for the odd luxury if you save enough.
  • Establish a Priority for Other Debts. Once you have a plan in place for taking care of your food and shelter needs, it’s important to consider your other bills and debts. Making calls to your creditors and asking for help with creating a flexible payment plan can help. For any creditor that wouldn’t (or couldn’t) be flexible, try to budget so you can at least make your monthly minimum payment.
  • Prioritize Your Necessary Expenses. Make a hierarchy of your necessities and order them by priority so you can make sure they’re each taken care of. At the top of the list should be food and shelter – the things everyone needs. If meeting rent or mortgage payments is a concern, it can help to contact your landlord or lender to discuss payment options. This can be especially important during times of economic distress. As for food, it’s important to stick to the “basics” to cover your dietary needs. Inexpensive, long-lasting canned food and dry pasta can be a great way to minimize costs and maximize storage life. Couponing can help stretch your food budget even further.
  • Keep Track of Your Expenses. When planning your monthly budget, it’s easy to miss certain daily expenses that can add up over time. So, when you first start crafting your monthly budget, be sure to record each of your purchases or other expenses as you make them, note any recurring expenses (like subscription services) you might have, and add them all together. You might find that there are some pretty frequent expenses that you might have forgotten about. By tracking your expenses, you can include these expenses in your budget and even find ways to cut them back.

2. Set Financial Goals You Can Achieve

You might already have a general financial goal in mind like “pay off my debt” or “buy a home” in mind when considering a debt consolidation service. However, there’s more to financial goal-setting than that.

When you create a goal for yourself, it can help to follow a specific goal-setting framework, like the SMART framework. SMART is an acronym for:

  • Specific. Goals should be as specific as possible so you know what you want to achieve.
  • Measurable. Goals should have some kind of clear, objective measurement so they’re easy to track.
  • Achievable/Attainable. Goals should be realistic so you know you can meet them. Otherwise, it could become demoralizing if they go unmet by too wide a margin.
  • Relevant. Is the goal meaningful to you? While financial goals are almost always “relevant” to your situation, it helps to pick a goal that will keep you motivated.
  • Timely/Time-Based. Is there a set time for accomplishing your goal? Keeping a due date in mind can help keep you motivated so you can give yourself an extra push if needed.

For example, a SMART goal for debt management might look something like: I want to pay down my $30,000 debt by 33% by the end of next year. Depending on your budget, this goal should be achievable; it’s specific and measurable; it’s relevant to the person, and there’s a due date to help keep things on track.

Setting some short-term goals can help to keep you motivated by breaking things up into more manageable tasks that contribute towards your long-term goals. For example, taking that goal of paying off 33% of your $30,000 debt by the end of next year, you can turn that into paying $833 towards my debt each month for 12 months.

 

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3. Learn how to make your money work for you.

While paying down debt is a good start, it can also help to find ways to make the money that you have work for you. For example, setting aside some room in your monthly budget to invest in a Registered Retirement Savings Plan (RRSP) or TFSA can help you get set for retirement later on.

Money saved in an RRSP is compounded over time – making it kind of like the good twin to credit card debt. Money put into an RRSP is “pre-tax” and will grow tax-free until it is withdrawn. At the time of withdrawal, the money is taxed at the marginal rate.

Canadians who want to save money for retirement or who need to have a fund to cover a big emergency but are on a low income should consider a TFSA.

However, it’s important to note that the taxes for an RRSP withdrawal are taken from that withdrawal – if you withdraw $1,000, about 20% of it will be withheld for tax purposes, resulting in a payment of $800 (or less). So, if you’re withdrawing to cover an emergency, it’s important to take this into account.

How much money could you save in a DCP versus managing debt on your own? Check out our Debt Repayment Calculator to find out now!

Am I Eligible for Debt Consolidation Services?

If your monthly debt payments – not including your mortgage or rent – are higher than 20% of your income, this is a sign that you could be in financial trouble. At Credit Canada Debt Solutions, we welcome anyone in Canada who needs advice on how to best handle their money and reduce or eliminate balances owed to experience true debt relief.

Our clients come from all walks of life and are eligible for help, regardless of their income level or employment status. There’s no pressure or judgment and everything we do for you is confidential.

Once we understand your full financial situation, you can either enroll in a DCP or we can help you explore alternative solutions, such as securing a debt consolidation loan that will suit your unique financial situation, needs, hopes, and dreams.

A debt consolidation loan is a money management tool that allows you to combine or consolidate your unsecured debt into a single loan from a single lender—helping you experience faster relief by gathering the combined sum of your unsecured debt into a single loan with a set interest rate.

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Debt Consolidation Program or Loan

Should you sign up for a DCP or take out a debt consolidation loan in Ontario or other Canadian provinces? Should you consider a consumer proposal, or just manage your debt on your own? Take our free Debt Assessment Quiz to find out. It’s just four simple questions but the results could change your financial future!

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Debt Help Makes Life Less Complicated!

Paying down debt through a DCP might be something that works for you. It’s not a complicated process because you’ll have a certified Credit Counsellor handling all the details for you every step of the way. And, by only having to make one monthly payment, life gets a whole lot easier!

And that’s not all. Debt consolidation services offered through Credit Canada Debt Solutions also include valuable financial advice and tools.

  • Need new money management skills? You’ll get them!
  • Want to discover how to create a personal monthly budget to help you pay your bills,  track your spending, and find easy ways to save? You got it! 
  • Looking to set financial goals you can reach? We’ll get you there! 
  • Want to start building good credit? We’ll show you how!

Ready to reduce or eliminate debt? Start your journey towards debt relief today! Our Credit Counsellors will give you everything you need to set yourself up for a bright financial future.

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What Will My Life Look Like On A Debt Consolidation Program?

A Brighter Financial Future

Credit counselling through our DCP brings benefits that can impact your entire life. It can help you take control of your debt and teach you smart money management skills – like how to budget, control spending, and reach financial goals. You’ll also learn how to achieve long-term financial security for you and your loved ones, as well as accomplishing your hopes and dreams in life, such as:

  1. Owning your own home, having nice things, and travelling to unexpected places.
  2. Putting your kids through school, and retiring in comfort. 
  3. Putting aside worry, anger, and grief about money and finally living comfortably and stress-free.

A debt management plan is not just about crunching numbers. It’s about understanding why you treat money the way you do. It’s about becoming moneywise, working on your financial wellness, and using financial tools that can put you in control of your own future.

Hopes and Dreams Realized After Debt Consolidation

How to Consolidate Your Debt

Wondering how to consolidate your debt? You’re not alone! Knowing what to do next with your debt can be stressful, especially if you feel like you’re out of options. Let the Ontario debt experts help! 

Get a Free Debt Assessment

Scheduling a free Debt Assessment is the first step in the consolidation process. Of course, we know it’s not always easy talking to a stranger about your finances, so get to know the caring Credit Counsellors at Credit Canada before you make an appointment! Like Kerri, our in-house French-speaking expert; Josie, who has over 20 years of financial experience; or Randolph, a family man with three kids, along with our other caring and qualified Counsellors. Check out this quick video to meet some of our Credit Counsellors.

Now, all you need to do is fill out the form below and one of our credit counselling experts will contact you to begin discussing your personalized debt relief options, including our DCP, one of the best such programs in the country.

Credit Canada has over 50 years of service, and we’ve helped more than 2 million Canadians resolve over $350 million in debt. We look forward to helping you too!

Frequently Asked Questions

What is debt consolidation?

Debt consolidation is the process of combining multiple debts into one. There are a variety of debt consolidation options.

How do I consolidate my debt?

There are a variety of debt consolidation options, including a credit card balance transfer, a debt consolidation loan, a home equity loan, or a Debt Consolidation Program (DCP). Each can be used to help pay off debt.

What is a Debt Consolidation Program?

A DCP is an arrangement between you and your creditors facilitated by a non-profit credit counselling agency that works on your behalf. The debt consolidation services agency will negotiate with your creditors to reduce or stop the interest on your individual balances owed, and then roll all of the eligible balances into one lower monthly payment.

Can I enter a Debt Consolidation Program with bad credit?

Yes, you can sign up for a DCP in Ontario even if you have bad credit. Your credit score will not impact your ability to get debt help through a DCP. Bad credit can, however, impact your ability to get a debt consolidation loan.

How long does it take to complete a DCP?

Debt consolidation services and solutions vary depending on each individual’s unique financial situation. However, DCPs can be completed within 2-4 years. Most clients can often complete the program and be debt-free in 3 years.

Do I have to give up my credit cards in a Debt Consolidation Program?

If you enter a DCP in Canada, you will have to refrain from using credit, which includes credit cards; however, you can still use a secured credit card. Once you’ve successfully completed the program, you may be eligible for an unsecured credit card.

 

 

Will creditors continue to contact me while I’m on a DCP?

No. Once you’ve signed up for a Debt Consolidation Program, your Credit Counsellor will ensure that all collection calls and letters stop.

Will Debt Consolidation hurt my credit score?

Most people entering a DCP already have a low credit score. While a Program could lower your credit score at first, in the long run, if you keep up with the Program and make your monthly payments on time as agreed, your credit score will eventually improve.

Does a DCP cost money?

A reputable non-profit debt relief organization will charge a minimal, monthly maintenance fee that will be included in your monthly payment, which will be lower than what you’re currently paying. The money you save on a DCP far outweighs these fees.

Is a DCP a better option than a consumer proposal or bankruptcy?

Everyone’s financial situation is unique; however a Debt Consolidation Program will not be as harmful to your credit as with a consumer proposal, nor will it jeopardize any of your belongings as with a bankruptcy. You’ll also gain money management skills that can help you for the long-term and avoid debt in the future.

Where can I find Debt Consolidation help?

Credit Canada is a non-profit credit counselling agency with more than 50 years of experience helping Canadians find debt relief. We can help you too. Give us a call at 1.800.267.2272 to book a free counselling session with one of our certified Credit Counsellors or fill out our Debt Assessment form online to discuss your options!

Can you get out of a DCP?

Anyone who signs up for a DCP must sign an agreement; however, it's completely voluntary and any time a client wants to leave the Program they can. Once a client has left the Program, they will have to deal with their creditors and collectors directly, and if their Counsellor negotiated interest relief and lower monthly payments, in most cases, these would no longer be an option for the client.

Get out of debt. Get back into life.

To speak to someone right now, call: 1 (800) 267-2272

Or, request a callback from one of our certified credit counsellors. It's free.