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Debt Consolidation

“A simple way to combine several smaller loans into one single monthly payment.”

Consolidation loans in Canada are available at banks, credit unions and finance companies. You can apply for an unsecured or secured consolidation loan (for example, obtain a second mortgage to pay off credit card debt). To qualify for a debt consolidation loan, you need to have good credit.  Being significantly behind on your payments could mean being turned down or the interest charged may be so high.

You may need to have an asset worth at least as much as the loan you are applying for. Your bank may expect security and consolidation loans such as a Home Equity Line of Credit (HELOC) or second mortgage. They usually provide lower interest rates than signature only loans (unsecured debt consolidation loans). However, keep in mind that not all debts can be included in a consolidation loan. Secured debts such as your mortgage and car loan don’t qualify.

Lower monthly payments:

  • Convert high interest credit card debt into a new loan with a lower overall interest rate and you may be able to save on interest and lower your monthly payment
  • Extend your repayment term to reduce your monthly payment—be aware this will keep you in debt longer

Save on interest costs:

  • Consolidating high interest credit card debt into a bank loan or second mortgage which carries a lower interest rate can save you interest over the long term
  • How much you save depends on how fast you pay off your new loan

One easy monthly payment:

  • Biggest advantage is having one (1) simple monthly payment instead of multiple payments
  • A debt consolidation loan may seem like a great way to deal with your debts however not all consolidation loan companies are created equal and not everyone qualifies. Talk to J Bottom & Associates Ltd before signing a debt consolidation. If the interest rate or up-front fees charged by the consolidation loan company are too high—shop around. Don’t feel pressured into taking any offer immediately.
  • Beware of debt consolidation loan scams. If you are not being advanced new money to pay off your old debt, what you are signing up for is NOT a debt consolidation loan. ‘Debt consolidation programs’ are not the same as debt consolidation loans.  It is important to understand what you are signing up for.
  • If your debts are so overwhelming, combining them into one monthly payment will likely leave you in debt for years.  Therefore, you should consider discussing other debt relief options with us.

Consumer Proposal

“ A debt management solution, designed for people who have a stable income, or have a third party to provide a loan, can pay some off their debts, but need a certain length of time to do so.”

– Consumer Proposal vs Debt Management Plan:


  • A maximum period of five years
  • Required acceptance by your creditors
  • Interest is frozen from the date that you file the proposal
  • Negotiate to repay only a portion of the debt
  • Wage garnishments are stopped immediately
  • Your creditors are “stayed” and cannot take legal action against you

Personal Bankruptcy

Bankruptcy is a legal process that allows you to eliminate most, if not all, of your debts.

Personal Bankruptcy is one option for solving your debt problems because it can provide immediate relief from the burden of overwhelming debts. It is for people who are having financial trouble, are getting behind on monthly payments, and other expenses. It is administered by a Trustee in Bankruptcy under the Bankruptcy and Insolvency Act (BIA) and is designed to allow an honest, but unfortunate debtor, to gain a fresh financial start.

In a bankruptcy you surrender your assets, subject to certain Provincial exemptions, complete certain duties during your bankruptcy; and at the end of your bankruptcy your debts are eliminated. However, your ability to obtain credit in the future will be affected, but you will be able to get rid of most, if not all, of your debts.  The cost of filing personal bankruptcy in British Columbia depends on a number of factors including your monthly income, the size of your family, and your assets. Like many things, it is always advisable to obtain two (2) to three (3) quotes for fees.

The Benefits of Filing Personal Bankruptcy

  • Protects you from legal actions from your creditors
  • Eliminates your debts
  • Stops collection calls and harassment from creditors
  • Stops wage garnishments and protects some of your assets
  • Provides for credit counselling to prepare you for a stronger financial future

What happens after filing bankruptcy?

  • Your assets are given to the trustee, except for certain assets that you are allowed to keep
  • Your trustee turns those assets into cash value by selling them
  • You are required to pay a minimum contribution towards your bankruptcy plus an additional payment, called a surplus income payment, based on your income
  • The proceeds from the sale of your assets and your payments are then distributed among your creditors

What You Should Know About Bankruptcy

You do not lose everything by filing personal bankruptcy in Canada. Bankruptcy is not meant to be a punishment. It provides a fresh start. The Bankruptcy and Insolvency Act, along with provincial legislation in your province, prevents your creditors from seizing certain assets, which may include your car, furniture and RRSPs within certain limits.

  • You are protected from further legal action by your creditors
  • Bankruptcy law provides for something known as an ‘automatic stay’ and so creditors can no longer collect on your unpaid debts prior to bankruptcy
  • All unsecured creditors are included in a bankruptcy
  • Eliminates most (if not all) of your debts
  • Bankruptcy is about giving you a fresh financial start by eliminating your overwhelming debt
  • Begin the process of rebuilding your credit and starting over