Best Debt Consolidation in Canada

Trying to keep up with multiple debts can feel like a full-time job. Between credit cards, payday loans, and personal lines of credit, it’s easy to feel like you’re sinking instead of moving forward.

Now, with Canadian household debt hitting record highs and interest rates staying just as high, more Canadians are looking for the best debt consolidation in Canada to get back on track.

However, there isn’t a one-size-fits-all solution. The “best” option depends on your situation: your income, your debt level, and your long-term goals.

Why Choose the Best Debt Consolidation Option?

The right debt consolidation option can take a lot of weight off your shoulders. Instead of juggling several payments, you’ll only have one to manage.

It can also save you money: credit cards in Canada often charge 19% or more, but consolidating into a better plan can cut those costs. Some solutions go even further, where Licensed Insolvency Trustees (LITs) can stop collection calls and wage garnishments, which are protections you won’t get from banks or unregulated lenders.

Types Of Debt Consolidation in Canada

There’s more than one way to consolidate debt in Canada. But each option has pros and cons, so it’s worth knowing how they work before making a decision.

Debt Consolidation Loans

A consolidation loan lets you combine multiple debts into a single payment. It could be a personal loan, a balance transfer credit card, or even a home equity line of credit (HELOC). The idea is simple: replace several high-interest payments with one that’s easier to handle.

The upside is that you may get a lower interest rate and a clearer path to repayment. However, getting approved usually depends on your credit score.

Debt Management Plans

A debt management plan is like having someone negotiate on your behalf. An accredited credit counselling agency works with your creditors to reduce or even remove interest charges, and you repay the full balance through one structured monthly plan.

It’s a straightforward way to make debt more manageable without taking on a new loan. The downside is that your creditors have to agree to the plan, and you don’t get the same legal protection you would with a consumer proposal.

Debt Settlement Programs

Debt settlement companies claim they can convince your creditors to accept less than what you owe. It sounds promising, but the reality isn’t always so simple. Creditors don’t have to agree, and even if they do, your credit score will usually take a hit.

Toss in steep service fees and the lack of legal protection, and it becomes clear why this option is considered high-risk. Some people do end up paying less, but it often comes with trade-offs that aren’t worth it.

Consumer Proposals

A consumer proposal is one of the most reliable ways to deal with debt in Canada. Filed only through a Licensed Insolvency Trustee, it can lower your unsecured debt by up to 80% while protecting your assets.

Instead of juggling multiple bills, you make one affordable monthly payment, and collection calls or wage garnishments stop immediately. The advantages are clear: legal protection, predictable payments, and real debt reduction. The only downside is that it shows up on your credit report.

How To Choose the Best Debt Consolidation Option for You

The best option isn’t one-size-fits-all — it comes down to your debt, income, and comfort level with risk. If you have strong credit and steady income, a consolidation loan or balance transfer card could lower your costs.

If your debt feels overwhelming, a consumer proposal offers legal protection and real relief. And if your debt is on the smaller side, a debt management plan may be all you need to stay on track.

Benefits of Working with Farber

Choosing Farber means working with government-regulated Licensed Insolvency Trustees who always put your best interests first. There are no upfront fees, and your first consultation is completely free.

From day one, you’ll be protected from collection calls and wage garnishments, guided through a plan that protects your assets, and supported on the path to rebuilding your credit.

Ready to take back control? Book your free consultation today and discover the best debt consolidation options in Canada for your situation.

Frequently Asked Questions

What is the best debt consolidation option in Canada?
It really depends on your situation. For some people, a loan works best. For others, a consumer proposal is the safer and more effective option because it reduces debt and provides legal protection.

How do I know if I qualify for debt consolidation?
Eligibility depends on your income, credit score, and total debt. Loans usually require good credit, while consumer proposals are available to most Canadians with over $1,000 in unsecured debt.

Can a consumer proposal be better than a consolidation loan?
Yes. If you don’t qualify for a low-interest loan, a consumer proposal can reduce the amount you owe and give you legal protection that loans don’t offer.

Are debt consolidation services safe in Canada?
Yes, as long as you work with a Licensed Insolvency Trustee or an accredited non-profit credit counselling agency. Be cautious of unregulated companies that charge high fees without offering meaningful protection.