Debt Consolidation: How to File
Not sure which option is best for you? At Spergel, we break it down clearly so you can make the right decision for your financial future.
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What is the Difference Between Debt Consolidation vs Debt Settlement vs a Consumer Proposal?
With a consumer proposal – Canada’s most powerful debt relief option – you may achieve the best of both.
Debt consolidation combines multiple debts into a single monthly payment, often with a lower interest rate. Debt settlement, on the other hand, means negotiating with your creditors to pay back only a portion of your total debt.
Your Path to Simpler Payments Begins Here
Use our Debt Calculator to estimate how much you can save by consolidating your debt. It’s quick and easy.
comparison chart
Debt Consolidation vs. Debt Settlement vs. a Consumer Proposal
Understand your options before choosing a path to financial freedom. Here’s how consolidation, settlement, and consumer proposals compare:
| Debt Consolidation | Debt Settlement | Consumer Proposal | |
|---|---|---|---|
 What It Is |
Combines debts into one loan |
Negotiate to pay less than owed |
Federally regulated debt relief option |
 Who It’s For |
Those with stable income and good credit |
People unable to repay full debts |
Canadians with $10,000+ in unsecured debt |
 Pros |
Simplified payments, lower interest |
Lower total debt amount |
Reduces debt by up to 80%, protects assets |
 Cons |
Doesn’t reduce total debt |
May hurt credit, risky with scams |
Requires filing through a Licensed Insolvency Trustee |
 Creditor Protection |
No |
No |
Yes – stops collection calls & wage garnishments |
|
Keeps Assets? |
Yes |
Yes |
Yes |
What It Is
Debt Consolidation
Combines debts into one loan
Debt Settlement
Negotiate to pay less than owed
Consumer Proposal
Federally regulated debt relief option
Who It’s For
Debt Consolidation
Those with stable income and good credit
Debt Settlement
People unable to repay full debts
Consumer Proposal
Canadians with $10,000+ in unsecured debt
Pros
Debt Consolidation
Simplified payments, lower interest
Debt Settlement
Lower total debt amount
Consumer Proposal
Reduces debt by up to 80%, protects assets
Cons
Debt Consolidation
Doesn’t reduce total debt
Debt Settlement
May hurt credit, risky with scams
Consumer Proposal
Requires filing through a Licensed Insolvency Trustee
Creditor Protection
Debt Consolidation
No
Debt Settlement
No
Consumer Proposal
Yes – stops collection calls & wage garnishments
Keeps Assets?
Consumer Proposal
Yes
Bankruptcy
Yes
Consumer Proposal
Yes
Which option is right for you?
Book a free consultation with Spergel today, and we can help determine the best solution tailored to your unique financial circumstances.
When is Debt Consolidation Not the Answer?
Debt consolidation isn’t always the right fit, especially if you’re already falling behind on payments, facing collection calls, or dealing with wage garnishments.
In these situations, consolidating your debt may not go far enough to provide real relief. If your debt is simply too large to repay in full, or your credit is preventing loan approval, other solutions may be more effective, such as a consumer proposal.
When is Debt Consolidation the Answer?
Debt consolidation could be the right solution if you’re juggling multiple high-interest debts like credit cards or personal loans and want to simplify your payments into one manageable monthly amount.
It works best when you have a stable income and good credit, allowing you to lower your interest rate and reduce financial stress. While it doesn’t reduce the total amount you owe, it can help you regain control and stay on top of your payments.
next step
What’s the First Step for Debt Help?
The first and most important step is to speak to a Licensed Insolvency Trustee.The first step is to speak to a Licensed Insolvency Trustee.
Licensed Insolvency Trustees (LITs) are the only professionals in Canada legally able to file all forms of debt relief. At Spergel, our experienced LITs offer:
- Free consultations
- As many meetings as you need
- A full review of your financial situation and tailored options
- Affordable debt relief solutions
- A 99% acceptance rate on consumer proposals we file
Everyone’s Situation is Different. Let’s Talk About You.
Book a free call with Spergel today, and we’ll create a plan that’s right for your life.
Real Canadians. Real Success — Like Chelsey
“I am immensely grateful to the Spergel team for guiding me through a challenging financial crisis with empathy and expertise. From negotiating with my creditors to providing emotional support and financial education, Spergel transformed my situation from imminent bankruptcy to renewed stability. Spergel is not just a service; they are partners committed to empowering individuals through complex financial journeys, and boy, was mine complex.”
– Chelsey B., British Columbia
Chelsey's Story is just one of many.
It shows that once you face your debt and get the right help, life can get better – quickly. Discover more Success Stories of Canadians we’ve helped, or reach out to us.
How We’ve Helped Others
Every debt story is different — and so is every solution. Here’s what real clients had to say about working with Spergel.
Let’s Explore What’s Possible — Together
You’ve carried this burden long enough. It’s time to talk through your options with someone who truly understands.
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