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In a time of rising inflation, it can be difficult to pay off your debt on top of managing your regular expenses. Sadly, there are no free Canadian government grants to pay off debt unless you own a business. However, you might be able to get a better handle on your debt with some of the credit counselling companies and financial strategies listed below.
Are there free Canadian government grants to pay off debt?
Finding free Canadian government grants to pay off debt isn’t possible for personal debt unless you qualify for COVID-19 funding. This exceptional funding may be issued on a federal or provincial basis and you’ll need to meet eligibility requirements to qualify. In most cases, free Canadian government grants to pay off debt are reserved for businesses.
Free resources to help you pay off debt
You may be able to access the following services to manage your finances instead of searching for free Canadian government grants to pay off debt:
Credit Counselling Canada
What is it? Credit Counselling Canada is an umbrella agency that provides accreditation for non-profit credit counselling agencies.
How can it help? Member organizations (several listed below) can help you explore your debt management options by laying out your choices and providing pros and cons for each. It can also help with financial literacy and budgeting.
What is it? Credit Canada is a non-profit credit counselling agency that’s accredited by Credit Counselling Canada. It offers debt management and consolidation services to clients struggling with their finances.
How can it help? Access the service if you need help managing your money, paying off debt or improving your credit rating. You can also participate in debt assessments, educational seminars, budgeting and goal setting.
What is it?Credit Counselling Society is a non-profit credit counselling and debt management agency that works across several regions in Canada. It is accredited by Credit Counselling Canada.
How can it help? Get expert advice on how to manage, consolidate or settle your debt. This agency also helps with referrals for bankruptcies and consumer proposals, along with dealing with debt collection agencies.
Where is it available? Visit an office in person in BC, Alberta, Saskatchewan, Manitoba and Ontario. Access phone service only in Yukon, Northwest Territories and Nunavut.
Money Mentors
What is it?Money Mentors is an Alberta-based, non-profit debt relief and financial education company. Its credit counsellors offer in-person and online support, along with delivering special financial literacy programs for schools and workplaces.
How can it help? Consolidate your debts or get set up with an Orderly Payment of Debts (OPD) program to get lower interest rates. You can also access credit counselling, financial education, budgeting tools and other financial resources.
Where is it available? Available in Alberta – specifically in large cities such as Calgary, Edmonton, Grande Prairie, Lethbridge, Medicine Hat and Red Deer.
Solve Your Debts
What is it?Solve Your Debts is a non-profit credit counselling and debt management company that works in the Eastern provinces, including Quebec. It is also accredited by Credit Counselling Canada.
How can it help? Use the agency’s services to learn more about your options and create a customized plan to deal with your debt. You can also get trusted referrals to partner organizations for bankruptcy or consumer proposal proceedings.
Where is it available? Visit an office in Newfoundland, Nova Scotia, New Brunswick, PEI or Quebec.
4 other ways to pay off your debt
Think about the following financial solutions instead of trying to find free Canadian government grants to pay off debt:
1. Debt consolidation loan
Debt consolidation loans let you take out an overarching loan to pay off all your other debts. You’ll usually get a lower interest rate and a longer term, which means you get lower monthly payments and can pay more towards your principal.
Debt relief companies are usually for-profit companies that help you settle your debt for less than what you truly owe. These companies negotiate on your behalf with your creditors to get them to reduce how much you owe in exchange for guaranteed payment.
Consumer proposals are formal and legally binding repayment agreements administered by a Licensed Insolvency Trustee (LIT). You develop a proposal which gets submitted to your creditors, who then vote to accept or reject your proposed repayment plan.
Pros
Cons
Reduces your debt or extends your payment period
Repay the LIT instead of the creditors
Creditors must ease off
Costs around $1,500
Can be rejected
Proposal annulled with 3 missed payments
Debts over $250,000 not eligible (excluding mortgage)
4. Balance transfer credit card
Transfer your debts from several credit cards onto a single card with a promotional balance transfer rate (usually 0% interest in your first 3–12 months, depending on the card). After that time elapses, you’ll pay a normal interest rate.
Pros
Cons
Low interest if you qualify
One easy payment
May come with a fee of 3–5%
You may need excellent credit to qualify for promotional 0% rate
There are no free provincial government grants to help you deal with personal debt. Available grants seem to be reserved for businesses in Canada struggling to make ends meet. However, you may be eligible for certain grants if you’re a student or have been affected by COVID. Check with your province to see what’s available.
There’s no federal government debt relief program outside of filing for consumer proposals or bankruptcy. The only 2 provinces that seem to offer provincial debt relief programs are Alberta (through its Orderly Payment of Debts program) and Quebec (through its Voluntary Deposit Service).
The fastest way to get out of debt is to create a debt management plan and a monthly budget. You should track every dollar you spend to make sure you know where your extra funds are going. You’ll also want to have a list of your debts and know when payments are due. If it’s difficult to track, you may want to consider getting a debt consolidation loan.
There is no provincial debt forgiveness program available in Ontario. The best you can do is access a consumer proposal, file for bankruptcy or work with a debt settlement company to resolve your debts. You can also explore your debt relief options with a credit counselling service in your local area.
Save money by only spending on what you absolutely need. Design a budget and stick to it. Cut out unnecessary purchases such as monthly subscriptions, entertainment, dining out and travel until you’re in a better financial position. Ask for a raise at work or look for a second job to start saving a bit more. Be kind to yourself, but stay disciplined with how much you spend.
Claire Horwood is a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee.
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