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If you’re ready to get out of debt once and for all, it’s important to understand your options. While filing for bankruptcy is often the first thing that comes to mind, you may have alternative debt relief solutions available to you, such as a consumer proposal or debt consolidation.
Not sure where to start? Your local MNP LTD Licensed Insolvency Trustee can help you navigate your options. We’ll review your unique financial situation and discuss all available debt relief solutions, so you can choose the best path forward.
It’s stressful to live with debt, especially if you feel it’s out of your control. Fortunately, there are several ways to break the cycle of debt and get on the path to a brighter financial future. In addition to other debt relief options not provided by MNP LTD, the most common debt solutions across Canada include:
Bankruptcy is a legal process that provides immediate relief from your unsecured debts, such as credit card debt, but it’s not necessarily an all-encompassing solution.
View Personal BankruptcyIf you’re struggling with debt but also have assets you wish to keep, a consumer proposal might be the life-changing debt solution you’re looking for.
View Consumer ProposalYou may be able to combine multiple debts into one overall loan—provided by your bank or financial institution—to make budgeting for repayment easier.
View Debt ConsolidationThe MNP Debt Calculator gives you an overview of your debt relief options, including timelines and associated costs of each solution. This tool takes into account the value of your assets, your income, and your total debt load to provide estimates that can help you weigh your options.
The insights provided by the MNP Debt Calculator are approximated and may not directly match your situation. We recommend that you consult with an MNP Licensed Insolvency Trustee for confirmation.
Consumer debt generally falls under two main categories: secured debt and unsecured debt. The key difference between the two is that secured debt is guaranteed by some form of collateral, while unsecured debt is not secured by any form of collateral.
Secured debt is guaranteed by its collateral, reducing the risk to secured creditors. Should you fail to pay a secured debt (e.g., a mortgage), the creditor can begin proceedings to seize and sell the collateral (e.g., foreclosure on your house) in order to repay the debt. Examples of secured debt include:
It’s important to note that secured debts are not included in a bankruptcy. In Canada, secured creditors cannot typically terminate your mortgage or secured loan simply because you filed for bankruptcy. This means you can continue to live in your home, but you will still need to make mortgage payments. If you are unable to keep up with your mortgage payments, however, your creditor may seize your property.
Unsecured debt is not secured by any collateral, which means creditors cannot seize any assets in the event of non-payment. However, unsecured creditors can hire debt collectors to pursue you, can sue you and, if successful, request to have your wages garnished and report your delinquency to credit bureaus, negatively affecting your credit score. Examples of unsecured debt include:
Most unsecured debts are eliminated by bankruptcy, with only a few exceptions (e.g., certain student loans, child support payments, and court fines). Once you complete the bankruptcy process, you will no longer have to pay any unsecured debts in existence prior to you filing for bankruptcy.
In Canada, student loans are subject to specific rules in bankruptcy. These loans can only be discharged if at least seven years have passed since you ceased being a student.
A consumer proposal is a formal agreement with your creditors to settle debts for less than the full amount owed. It allows you to avoid bankruptcy while providing a manageable repayment plan.
Receivership is a remedy available to secured creditors to recover their debt. A receiver is a person appointed by a secured creditor or by the court to take control of a company’s assets, sell them, and repay the creditor.
2025-01-16
MNP Consumer Debt Index
What happens to your savings account during a Consumer Proposal? Learn about the factors impacting what happens to the funds in your savings account.
2025-01-13
MNP Consumer Debt Index
Albertans are feeling more pessimistic about their personal finances heading into 2025, despite declining interest rates.
2025-01-13
MNP Consumer Debt Index
The latest MNP Consumer Debt Index has dropped to 79 points, a staggering 10-point decline from last quarter.
