Start with the problem a solution needs to solve
A missed payment after a short interruption in income is different from a budget that has been short every month for a year. Both deserve attention. Before comparing products or formal processes, write down whether the difficulty is temporary, ongoing or still uncertain.
Next, separate essential living costs from debt payments. Include expenses that arrive annually or seasonally. A monthly number that leaves out insurance renewals or school costs can look affordable until those bills arrive. Our monthly budget guide gives you a place to start.
Four routes worth discussing
| Route | What to investigate | Important limit |
|---|---|---|
| Direct creditor arrangement | Whether a creditor will change payment dates, interest or repayment terms. | Get the actual agreement in writing; one creditor's agreement does not settle other accounts. |
| Debt consolidation | Whether a new loan or line of credit lowers the total cost and fits your budget. | You still need to repay the new borrowing, and approval is not guaranteed. |
| Credit counselling and a debt management plan | Whether advice or a negotiated payment arrangement would help. | A plan depends on creditor participation and generally requires repayment of principal. |
| Consumer proposal | Whether a formal offer through an LIT is appropriate for your situation. | Eligibility, acceptance, credit effects and completion duties all matter. |
The FCAC's debt repayment guidance and the OSB's comparison of debt solutions are useful independent starting points.
A smaller monthly payment is only one part of the decision
When you receive an offer, put the monthly payment beside the total amount payable, the end date and any fees. A lower payment over a much longer period can keep you committed for longer than you expected. A plan also needs room for debts that are excluded and for your ongoing living costs.
For a consolidation product, ask whether the rate can change and whether an asset is being used as security. For a debt management plan, ask what happens if one creditor declines. For a proposal, ask what happens if your income drops after acceptance. These questions help you compare the actual terms, rather than the appeal of a headline.
Read our comparisons of proposals and consolidation and proposals and credit counselling for a more focused discussion.
A four-question worksheet for your next conversation
- What money is reliably available? Use take-home income you can reasonably expect, not a hoped-for bonus or overtime shift.
- What must continue outside the arrangement? Write down housing, food, transport, support obligations and any debts the proposed route would not resolve.
- What could interrupt the plan? Identify a predictable expense, a possible income change and the first person you would contact if a payment became difficult.
- What am I trading for this payment? Consider the total cost, timeline, credit effects, legal protection and any risk to an asset.
Bring your answers to a professional assessment. The purpose is to surface questions early, not to diagnose your own eligibility. An honest estimate is more useful than a perfect-looking budget you cannot follow.
Know when to get help promptly
If you have received court papers, a garnishment notice or a demand involving your home or vehicle, tell the professional when the next deadline falls. General website information cannot determine what action is required in your specific case. Do not assume that completing a contact form pauses a deadline.
Be cautious about pressure to sign immediately or promises to erase debt without reviewing your finances. The OSB warns about unnecessary fees charged by debt advisers. You can consult an LIT directly and ask about the initial consultation before making a commitment.
ConsumerProposal.ca is an educational publisher, not an LIT. Use the official directory to find a licensed professional, or read how to prepare for that meeting.
Sources and further reading
Sources checked October 29, 2026. Guidance can change; confirm how it applies with a qualified professional.
