If money feels tight
Lots of people go through times when money is tight. It happens after a job change, an illness, a breakup, a big repair, or just rising prices. It isn't a personal failing, and there are people in Canada whose job is to help, often for free.
Three kinds of help
These three sound alike, but they do different jobs.
Non-profit credit counsellor
- Looks at your whole budget with you and talks through the options.
- A first conversation is usually free.
- Can set up a debt management plan: you make one monthly payment to the agency, and it pays your creditors. You repay the full amount you owe, but creditors often agree to lower or stop the interest.
- Credit counsellors don't need a special licence in every province. Many non-profit agencies are members of Credit Counselling Canada, which accredits its members.
Financial advisor or planner
- Helps with longer-term goals: saving, investing, retirement, and insurance.
- Some charge a fee. Others are paid a commission on the products they sell, like investments or insurance.
- In some provinces, including Ontario and Saskatchewan, people who call themselves a "Financial Planner" or "Financial Advisor" must hold an approved credential. Elsewhere, the titles may not be regulated.
- Most advisors don't handle debt problems directly.
Licensed Insolvency Trustee (LIT)
- The only professionals licensed by the federal government to handle consumer proposals and bankruptcies. They are overseen by the Office of the Superintendent of Bankruptcy, which lists every licensed trustee.
- A consumer proposal is a legal deal to pay back part of what you owe, over time. A bankruptcy is a legal process that clears most debts. Both affect your credit report for several years.
- A first meeting is usually free, and their fees are set by federal law.
- A trustee can also explain options that aren't a proposal or a bankruptcy.
Questions people often ask
Whoever you talk to, these questions can help you understand what's being offered:
- Are you a non-profit, a licensed trustee, or a private company?
- Who licenses or accredits you?
- What will this cost in total, and when would I pay?
- What are all my options, including ones you don't offer?
- How would this affect my credit report, and for how long?
- Can I have the plan and the costs in writing before I sign?
- Will you contact my creditors, or do I?
Warning signs
The Government of Canada warns that some companies make misleading promises about debt. Signs to watch for:
- Fees up front, before any real help is given.
- Promises to wipe out debt fast, or to fix your credit report for a fee.
- A company that calls itself a "debt relief", "debt settlement" or "government" program but is not a Licensed Insolvency Trustee or a non-profit credit counselling agency. Some only pass you on to a trustee and keep a fee.
- Being told to stop paying your creditors and pay the company instead.
- Pressure to sign today, or no clear answers in writing.
Where to learn more
- Financial Consumer Agency of Canada — the Government of Canada's plain-language guides on budgeting, debt, and your rights with banks.
- Getting help from a credit counsellor — the same agency's guide to credit counselling and other debt options.
- Credit Counselling Canada — find a non-profit credit counselling agency near you.
- Office of the Superintendent of Bankruptcy — look up a Licensed Insolvency Trustee and read about consumer proposals.
- 211 — a free, confidential line (dial 2-1-1) that connects people to local help with food, housing, and other needs.
About this page
Proof Panda is a budgeting and records app. We are not financial advisors, and nothing here is financial, legal, or tax advice. If something on this page is out of date, please tell us at [email protected].