Comparing the Best Debt Solutions: Which Option is Right for You

Posted on October 12, 2023 by Mihir (Mike) Chande, CPA, CA, CIRP, Licensed Insolvency Trustee

Dealing with debt is no walk in the park. It can feel like a heavy burden, constantly weighing you down. However, the good news is that there are various solutions available to help ease this load. Understanding the options, from consumer proposals to bankruptcy, is key in making an informed decision for your financial future.

Understanding Your Debt Relief Options

  1. Consumer Proposals
    A consumer proposal is a formal, legally binding process that is administered by a Licensed Insolvency Trustee. The trustee works with you to develop a proposal – an offer to pay creditors a percentage of what is owed to them, extend the time you have to pay off the debts, or a combination of both. This process allows for a maximum term of five years to pay off debts.
    The significant advantage here is that it helps you settle debts without filing for bankruptcy. This means that while it does impact your credit score, it’s not as severe as bankruptcy. Additionally, you get to keep your assets, which can be a huge relief.
  2. Bankruptcy
    Sometimes, the financial hole might be too deep, and bankruptcy could be the most viable solution. Declaring bankruptcy can provide a fresh start, free from the burden of insurmountable debts. However, it’s important to get solid bankruptcy advice before heading down this path, as it has far-reaching implications.
    Bankruptcy typically allows for debts to be discharged in as little as nine months, making it the fastest way to eliminate debt. However, this speed comes at a cost – the impact on your credit rating is significant and more enduring compared to a consumer proposal.
  3. Debt Consolidation
    Debt consolidation involves taking out a new loan to pay off multiple debts. This means you only have one monthly payment rather than several payments. This can be a viable option if you’re struggling with multiple debt payments and can secure a loan with a lower interest rate than your current debts.

Factors to Consider When Choosing a Debt Solution

  1. Impact on Credit Score: Your credit score is a key factor in your financial health. Consumer proposals and bankruptcies will both affect your credit score, but bankruptcy typically has a longer-lasting impact.
  2. Asset Retention: If owning your home or car is crucial, you’ll need to think carefully about which debt relief option to choose. In bankruptcy, you may have to surrender some of your assets, while a consumer proposal often allows you to keep them.
  3. Debt Load: The amount of debt you’re carrying can also influence your choice. Bankruptcy might be more suitable for those with a higher debt load that they can’t feasibly pay off.
  4. Long-Term Financial Goals: Think about your future goals. If you plan to buy a house or car in the future, how will a consumer proposal or bankruptcy affect these plans?
  5. Personal Mindset: How you personally feel about each option is also important. Some people want to avoid bankruptcy at all costs, while others might see it as a fresh start.

Seeking Professional Advice

When drowning in debt, getting a clear, unbiased perspective on your situation is crucial. This is where the services of a Licensed Insolvency Trustee come in. They can provide expert insights and tailor advice to your specific situation. Remember, it’s essential to explore all your options and understand each one’s consequences before making a decision. If you need more information or guidance, feel free to contact us at any time.


Choosing the right debt solution is a personal decision and depends on various factors, including your financial situation, goals, and attitudes towards debt. Whether it’s a consumer proposal, bankruptcy, or another debt relief method, the key is to choose an option that will offer you a new beginning and a clearer path towards financial freedom. Remember, there’s no one-size-fits-all answer when it comes to managing debt. Each journey is unique, and finding the right path requires careful consideration and often, professional guidance

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Mihir Chande
Mihir (Mike) Chande, CPA, CA, CIRP, Licensed Insolvency Trustee Mike, a Chartered Accountant, began his insolvency career in the Corporate Insolvency and Restructuring group at one of Canada’s largest insolvency firms. After gaining extensive experience, he founded Chande Debt Solutions to offer personalized and empathetic debt relief services to clients seeking an alternative to traditional solutions.

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