Debt Settlement: Types
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What Types of Debt Settlement Are There?
If you’re dealing with overwhelming debt, you’re not alone — and you have options.
In Canada, debt settlement typically comes in two main forms:
- informal settlement programs
- legal solutions like consumer proposals
Each option has its pros and cons, and understanding them is the first step toward taking control.
Informal settlement programs, often run by debt settlement companies, attempt to negotiate with creditors on your behalf. A more formal and legal approach is the consumer proposal, filed through a Licensed Insolvency Trustee. This option is regulated under the Ontario Collection and Debt Settlement Services Act and offers full legal protection.
Not sure which type is right for you? We’ll help you compare your choices with clarity and confidence.
Find Out How Much You Can Save – With a Consumer Proposal!
A consumer proposal is the only legally backed form of debt settlement in Ontario and can reduce your total debt by up to 80%. Use our free debt calculator to see what your new payments could look like.
Comparing Debt Settlement Options
Let us help you break down what’s best for your situation, so you can make the most informed decision.
Not all debt settlement approaches are created equal. Some offer faster relief with fewer risks, while others come with hidden fees or uncertain results. If you’re exploring debt settlement in Canada, understanding the differences between informal settlement programs and consumer proposals is key.
Types of Debt settlement
Explore the Options Available to You
There are two primary forms of debt settlement — namely, a debt settlement program and a consumer proposal. A debt settlement program or a consumer proposal are typically for those with over $10,000 worth of debt — with anything less, credit counselling or a debt consolidation loan may be more appropriate. Here is how each form of debt settlement works:
Informal Debt Settlement Programs
Mediated by debt settlement companies, this option involves negotiating directly with creditors. While it may lower your debt, it often comes with upfront fees and no guarantees that your creditors will agree.
Consumer Proposal
This is the only legally binding form of debt settlement in Canada. Filed through a Licensed Insolvency Trustee, it can reduce your debt by up to 80%, pause interest charges, and stop collection action — all while letting you keep your assets.
Book a free consultation with Spergel today, and we’ll walk you through your options to create a clear, affordable plan that works for you.
debt help
Which Types of Debt Can a Debt Settlement Program Help With?
A debt settlement program can provide relief from a wide range of unsecured debts, including:
- Credit card debt
- Retail and store card debt
- Payday loans
- Cell phone bills
- Utility bills
- Medical bills
- Non-government student loans
- Unsecured lines of credit
If you’re juggling multiple balances and rising interest rates, debt settlement may help simplify your financial life. Check out our most frequently asked questions to learn more about debt settlement in Canada.
popular option
Debt Settlement: Consumer Proposals
A consumer proposal is the safest, most effective form of debt settlement in Canada. Unlike informal programs, it’s legally binding and must be filed through a Licensed Insolvency Trustee. Once filed, it protects you from legal action, stops collection calls, and significantly reduces your debt — often by as much as 80%.
Governed by the Ontario Collection and Debt Settlement Services Act, this structured approach offers peace of mind with predictable, affordable payments. At Spergel, you’re assigned your own dedicated trustee to guide you every step of the way.
Looking for a real, lasting solution to debt? A consumer proposal could be your best option.
next step
What’s the First Step for Debt Help?
The first step toward debt relief is speaking with a Licensed Insolvency Trustee — the only professionals legally authorized to file all forms of debt relief in Canada.
At Spergel, our experienced trustees offer personalized, non-judgmental support. We’ll meet with you (as often as you need), review your financial situation, and clearly explain every option available — including whether debt settlement or another solution is best. There’s no pressure, just expert guidance. We’re proud to offer:
- Free, confidential consultations
- Clear, customized debt relief plans
- A 99% acceptance rate on the consumer proposals we file
- Help from the same trustee — start to finish
Everyone’s Situation is Different. Let’s Talk About You.
Book a free call with Spergel today, and we will make a plan with you on how to help.
Real Canadians. Real Success — Like Jordan
“After years of struggling with escalating tax debt and the overwhelming stress it brought into my life, finding Spergel was a turning point for me. Their team approached my situation with an incredible mix of professionalism, empathy, and expertise, taking the time to understand the nuances of my financial dilemma. They negotiated directly with the CRA, securing a payment plan that was both manageable and fair, and even managed to reduce my overall debt. What truly stood out was how they empowered me with the knowledge and tools to take control of my finances moving forward. Thanks to Spergel, I can focus on my career and being a father without the constant worry of tax debt looming over me.”
– Jordan, Ontario
Jordan'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 Find the Right Solution for You
Every financial story is different. Let’s talk about yours and explore the solution that fits you best.
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