How to Get Out of Personal Debt in Ontario - Adamson & Associates
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How To Get Out Of Personal Debt

How to Get Out of Personal Debt in Ontario

Canadians owe over $21,000 on average, not including mortgage debt.[1]

If you live in Ontario – and are having a hard time keeping up with your bills – it’s possible that number is considerably higher for you.

Consider these statistics from a recent survey on insolvent Ontarians:

  • Those who were homeowners owed $72,510 in non-mortgage debt; and
  • Those who were non-homeowners owed $52,634.[2]

Are you wondering why insolvent homeowners had more personal debt?

That’s likely because, due to the incredibly high housing prices in our province, homeowners can refinance their unsecured debt via a second mortgage or home equity loan.[3]

But taking on debt isn’t necessarily a problem…

Unless you are having difficulty paying it back.

If your debt is causing you anxiety and you’re wondering how you’ll ever repay it, know that there is a way for you to get the debt relief you seek.

The below 5 tips are intended to help set you on the journey to being debt-free.

Tip #1. Contact a Licensed Insolvency Trustee.

Licensed Insolvency Trustees are the only professionals authorized by the Canadian government to administer insolvency proceedings.

But that’s not all.

These federally-regulated and licensed professionals are qualified to assist you with a wide range of debt relief solutions…

From creating a budget all the way to filing for bankruptcy.

At your initial, free consultation, your Licensed Insolvency Trustee will get a comprehensive view of your financial circumstances and advise you of your available options and their pros and cons.

You’ll also receive a seasoned expert’s advice on which option makes the best sense for you and your family.

And remember, the sooner you seek out help, the more options you may have available to you.

Tip #2. Organize your debt so you can pay it back wisely.

Create a spreadsheet that lists each of your debts and their balances, interest rates, and minimum payments.

One strategy for debt repayment is to list your debts in order of highest-interest rate to lowest.

If you consider the total interest paid, the debt that charges you the most interest is your most expensive one.

So you may want to put as much money as you can toward the card with the highest interest rate, after paying minimums on all your other cards.

And once that card is paid off, go on to your next most expensive debt.

Alternately, you might try the “snowball method,” where after paying your minimums across the board, you put money towards the card with the smallest balance, pay that off, and move on to the next smallest balance.

This can give you momentum to keep tackling your debt.

Tip #3. Track your expenses and create a budget.

Track your weekly and monthly expenses to figure out exactly where your money is going so you can cut back. Seeing it in black and white may surprise you.

Are you spending a large amount every month on buying lunch at work? If so, start packing a lunch. Consider cutting those designer coffees, limiting eating out as entertainment, and cancelling unused gym or other memberships.

And be sure to create a budget. If you need help with this, go back to Tip #1. Licensed Insolvency Trustees can help you create a realistic one that you’ll be able to stick to.

Tip #4. Re-evaluate how you spend.

In order to pay off your debt, you don’t want to keep adding to it.

Perhaps go with a cash-only policy on items that aren’t essentials. Credit cards can make it easier to overspend.

And take advantage of auto-pay features for your utilities and credit cards so you don’t forget to pay them, incurring more high-interest debt and penalties.

Tip #5. Keep adding to your emergency savings.

Even though you’re in debt repayment mode, you want to continue to add to your emergency savings.

Most Canadians aren’t prepared for life’s unexpected events, including job loss, home or car repairs, funeral expenses, and so on.

So when these unforeseen occurrences hit, people turn to high-interest credit cards to make it through the stretch.

This simply catapults them further into debt, and puts them on the trajectory toward bankruptcy.

Contact a Licensed Insolvency Trustee Today

If you are encountering financial difficulties and need help getting the debt relief you seek, contact our offices today. Our goal is to help you resolve your debt in the best way possible for you and your family. We’re here to help you achieve financial freedom.

[1]https://globalnews.ca/news/3512571/canada-housing-debt-bankruptcy/
[2]https://globalnews.ca/news/3512571/canada-housing-debt-bankruptcy/
[3]https://globalnews.ca/news/3548933/canadian-provinces-ranked-by-average-consumer-debt-equifax-report/

John Adamson, CPA, CMA

John is a Licensed Insolvency Trustee (1994), a Chartered Insolvency and Restructuring Professional (CIRP – 1994), and a Chartered Professional Accountant with a Certified Management Accounting designation (CPA, CMA – 1992). His experience includes more than 25 years of helping individuals, small businesses, their owners and even lenders, find solutions to their debt problems.

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