4.6.8 Other approaches

Depending on your financial situation and where you live, you may be able to use alternative solutions to a serious debt problem. All of these approaches will involve fees in addition to interest charges.

Consolidation order

If you live in Alberta, Saskatchewan or Nova Scotia, you may apply for a consolidation order (also called an orderly payment of debt), under which you make payments to the court, and the court distributes them to your creditors. A consolidation order lets you pay off your debts over three years and frees you from collection calls and wage garnishment. Unlike bankruptcy, you do not lose your assets.

Voluntary Deposit scheme

For residents of Quebec, the Voluntary Deposit scheme is similar to a consolidation order. You must make a monthly payment, based on your income and number of dependents, to the court. This service is usually available at the local courthouse.

Consumer proposal

Under a consumer proposal, you make a formal proposal to your creditors to reduce the amount of your debts, extend the time you have to pay off the debt, or provide some combination of both. If the proposal is accepted by the creditors, you make a monthly payment to a licensed trustee. Consumer proposals generally last one to five years, and they can affect your credit record for three years after the last payment.


If none of the above methods solves your debt problem, you may choose to declare bankruptcy. You assign all of your assets, except those exempt by law, to a Licensed Insolvency Trustee (also known as a bankruptcy trustee)​. This process relieves you of most debts, and legal proceedings against you by creditors should stop. After declaring bankruptcy, you make a monthly payment to the trustee for at least nine months before being declared discharged by the court. Bankruptcy should be a last resort—it can be costly and will seriously affect your credit report. Bankruptcy usually stays on your credit record for seven years and it will reduce your ability to get most, if not all, types of credit.

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