Finding Financial Freedom: Debt Consolidation Guide 

^{By Christie Woods at Bromwich+Smith | 1590 words | Reading Time: 8 minutes  | Date: 2023/05/23}

When it comes to financial hardship many Canadians don’t know where to turn or feel ashamed having to reach out for help and guidance. I am so proud to work with Bromwich and Smith and watch thousands of Canadians find financial freedom again.  

 When it comes to debt consolidation that could mean many different things to everyone. For instance, there is an option with a lending institution to get a consolidation loan to help you pay off your current debt with this loan and then you would just have one loan to pay back. This might work for many; however, I find if you are already in a position of financial hardship getting one big loan might make things worse, our you might not even qualify for it. The other options that Canadians have are consolidating all their debt with a third-party company, such as an Orderly Payments of Debt companies. These companies will help you work out a monthly payment that will allow you to pay back all the debt you owe in full over a certain length of time.  The one disadvantage I can see with that is depending on your situation the monthly payment that is required might be too much to maintain. Then there is what Bromwich and Smith can assist you with, either a consumer proposal or a bankruptcy. Both are great options and would assist you with alleviating the financial burden you might currently be under. Neither option usually pays the debts back in full, but rather the creditors will receive a percentage of the debt back. Both options are set up based on your monthly income and budget, so the payments will be more maintainable in most cases then other options available to Canadians.  

 For most people the word bankruptcy is scary and taboo to say let along go through. I would love to see a society that no one was scared to share with their friends and family that they had to use a bankruptcy to help them out of a financial situation that has usually occurred due to some unfortunate events in their lives. Most people are not aware that the length of a bankruptcy is only 9-36 months long depending on a couple of different factors such as income and if they have ever filed a bankruptcy before. The moment you file an assignment into bankruptcy you will receive protection from your creditors by the way of a stay of proceedings, this means those harassing telephone calls will stop, any garnishees that are on your income will stop. In my role I often get asked if “I will go to jail if I file for bankruptcy”, we are lucky in Canada that the insolvency legislation exists this protects you from having to repay your debts by other means, in Canada you will not go to jail if you file for bankruptcy. A bankruptcy is a legal process and should be taken seriously, but it is here to help you as long as you complete the required duties you will receive a discharge and the debts that were causing you so much stress will be gone, barring any exemptions per the legislation.  

For most of our client’s bankruptcy is the last resort, and not something that they ever wanted to do but something has occurred such as illness, marital separation, death, and they have no other choice and need relief. As the senior financial wellness partner in the bankruptcy department, I have had the pleasure to assist hundreds of people go through a bankruptcy. When you get to deliver the news that they have completed the bankruptcy and that they are now discharged you can actually hear the stress that this has caused them leave their bodies, that is an incredible thing to be a part of. To obtain your discharge from the bankruptcy you are required to complete the following duties as per the legislation:  

• Attend 2 financial counselling sessions – these sessions are one on one with a counsellor and only 30-45 minutes long.  
• Provide monthly income and expense reports, along with proof of income.  
• Provide the information required to review your assets.  
• Provide the information required to file your taxes.  
• Make the required payments.  

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In my current role I am dealing more with the end of the bankruptcy and with files that require a court application, now don’t let the word court frighten you as it is something that I would work with you to still achieve your discharge. When it comes to needing to appear in court it is usually because something has happened and the client was not able to complete one or more of the required duties, such as not attending the two counselling sessions or providing their monthly income and expense reports.  I enjoy working with those clients to get the required duties completed and get them a discharge. Sometimes this process involves a lot of back and forth but hearing the client’s excitement and gratitude once they hear that all that work paid off and they got their discharge is worth it.  

 When it comes to a bankruptcy one of the most common things I have heard is “you are not going to sell everything I own?”, in Canada assets that you own do vest with the Trustee while you are in a bankruptcy, but that does not mean we will sell everything. When it comes to assets there are exemptions to what the Trustee can and cannot sell, these exemptions are based on the province that you live in and where you filed the bankruptcy. I think that the fear of the Trustee selling peoples assets comes from the fact that no one talks about bankruptcy and teaches people what it looks like and means, again it is still a very scary thing for people to talk about. The legislation for bankruptcy was set up to help Canadians receive relief from financial burdens and not take everything they own. However, in some cases some assets may need to be sold, again this all depends on the exemptions in your province, and our office would work with you through that process.  

 I am finding that more and more Canadians are looking for debt relief than ever before. Everyone has a reason behind why they need assistance with their debt, for some it is the current cost of living in the country, for others it might be illness or marital separation. I truly believe no matter the reason you might need a little extra help you should not be ashamed to reach out and ask for help. Financial struggles can be one of the most stressful things for people to go through, what I want readers to understand is that your personal worth as a human is not based on your financial wealth. The struggles that you might be going through today will make you stronger tomorrow, and we will be here to help you build a future without your current debt in it. 

If you find yourself in a position where debt is taking control of your life, reach out today and learn about your debt relief options.  Thousands of Canadians every year look to Licensed Insolvency Trustees like those at Bromwich+Smith to learn about available debt relief programs. Reach out today for a free, confidential, no obligation consultation. Bromwich+Smith’s Debt Relief Specialists are available by phone at 1.855.884.9243, or request a call back at contact us page or Live Chat.     

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FAQs Debt Consolidation Guide:

1: What is debt consolidation and how can it help Canadians facing financial hardship?  

Debt consolidation involves combining multiple debts into a single manageable payment. It can help Canadians by reducing the number of payments and potentially lowering interest rates. 
 
2: What are the options for debt consolidation in Canada other than getting a consolidation loan?  

Canadians can also consolidate their debt through third-party companies like Orderly Payments of Debt companies, or explore options like consumer proposals or bankruptcy, offered by companies like Bromwich+Smith. 
 
3: How does bankruptcy work in Canada, and what protections does it provide? 

 Bankruptcy is a legal process that can provide relief from overwhelming debt. In Canada, it lasts 9-36 months, and upon filing, you receive protection from creditors and a Stay of Proceedings , which stops collection efforts. 
 
4: What are the key duties required for a successful bankruptcy discharge?  

To obtain a discharge from bankruptcy, individuals must complete tasks such as attending financial counseling sessions, providing income and expense reports, submitting required asset and tax information, and making necessary payments. 
  
5: Is bankruptcy a last resort, and what are common reasons that lead Canadians to consider it?  

Bankruptcy is often considered a last resort when individuals face financial challenges due to reasons like illness, marital separation, or unexpected life events that leave them with no other viable options for debt relief. 

6: How does Bromwich+Smith assist individuals with debt relief through consumer proposals and bankruptcy?  

Consumer proposals and bankruptcy are two debt relief options offered at Bromwich+Smith. These solutions help alleviate financial burdens by negotiating with creditors for reduced payments or through a structured bankruptcy process. 
 
7: Can bankruptcy be a positive step towards a better financial future?  

Yes, bankruptcy can provide a fresh start and relief from overwhelming debt. While it's a serious process, completing the required duties leads to a discharge, allowing individuals to rebuild their financial lives. Bankruptcy is not the right debt relief option for everyone and all options will be discussed in your initial consultation. 
 
8: How does bankruptcy impact an individual's assets, and what factors determine what can be sold?  

Exemptions vary based on province and filing location. Not all assets will be sold, as the goal is to provide relief while considering the individual's specific circumstances. 

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Christie Woods, Senior Financial Wellness Partner  Christie is a senior member of the team and has incredible knowledge of bankruptcies and how to help clients move towards a successful financial future. When she has time, she likes to watch Disney movies and true crime documentaries, with her two fur babies and husband.  She loves to travel the world – her favorite destination so far is New York City with her mom and sister.