If you’re crumbling under debt in Alberta, you are NOT alone. Unfortunately, Alberta is leading the nations when it comes to consumer debt, according to a recent article from CityNews Calgary.

Now, when you’re under a heavy load of debt, the LAST thing you need is more loans, and you can be certain that loan sharks will smell the blood and will be showing you ads all over the internet to offer you more loans, even when traditional banks won’t loan you a dime.

Instead of blindly taking another loan, consider these options to decrease or clear your debt, which will give you much needed peace of mind, and the opportunity to start on a clean slate:

#1) Free Credit Counsellor (Best Option)

Credit counsellors are usually non-profit organizations (Consolidated Credit Canada is a popular one). They can offer free advice AND help you lower your debt at the same time.

Credit counsellors can help negotiate with your creditors, eliminate interest, offer budgeting assistance, recommend other professionals, and more.

If you are struggling with high debt anywhere in Alberta, and especially if you are in Calgary or Edmonton, the cities with the highest consumer debt in Canada, we highly recommend contacting a credit counselling agency as a first course of action.

These non-profits truly have your best interest at heart and won’t take advantage of your situation to put you deeper in debt and extract large sums of money out of you.

#2) Selling Assets (Home, Car, Jewelry, etc)

While drastic, selling valuable assets could provide funds to pay off debts. If you can sell some assets without putting yourself in a bad situation, then this is a great way to pay off debt without affecting your credit score. Selling your home and downgrading to a smaller home can be a great way to generate substantial capital that you can allocate towards paying off your debt.

Again, we don’t recommend choosing this option before speaking to a credit counselling agency, as they may be able to help you lower/clear your debt without losing any of your assets or home equity. They offer free advice so you have nothing to lose by speaking to them.

#3) Low-Rate Line Of Credit or Debt Consolidation Loan

If your credit score is still good, you may qualify for a LOW-RATE debt consolidation loan at your  bank. Now, we put “LOW RATE” in red and uppercase because it’s critical that your new debt consolidation loan has a LOWER RATE than your current debt rates, otherwise this solution doesn’t work and you could end up paying more in the end.

If you can qualify for a lower rate at your bank, combining multiple debts into one loan can be a great way to decrease your debt substantially, and simplify repayment since you will only make 1 monthly payment to cover all your debts.

Note that a credit counselling company can help you through this entire process, if you feel overwhelmed at the idea of negoating a new consolidation loan.

#4) Consumer Proposal in Alberta

If the above options don’t work for you, or your  situation is too dire for you to qualify for any of them, a Consumer Proposal might be the next best course of action.

A Consumer Proposal can lower your debt by 50%-70% or MORE, which makes it a great option for Albertans that cannot afford to repay their debt but would prefer to avoid damaging their credit profie by filing for bankruptcy.

A Consumer Proposal is a legally binding agreement with creditors, allowing you to propose a reduced payment plan. This is overseen by a Licensed Insolvency Trustee (LIT) who is an accredited professional that handles these agreements.

#5) Bankruptcy

the ultimate last resort should be a bankruptcy. This tells creditors that you are completely insolvent.

A bankruptcy is a legal process that you have to go through with a LIT (Licensed Insolvency Trustee). You can find LITs in Calgary, Edmonton, Red Deer and most Alberta cities. A bankruptcy can eliminate most unsecured debts but has significant long-term consequences.

A bankruptcy is attractive for many people because it allows you to get out of debt without paying much, but the consequences can affect you for the rest of your life.

Important Considerations Before Making a Decision

• Seek Professional Advice IMMEDIATELY: Consult with a credit counselor in Alberta or Licensed Insolvency Trustee to assess your situation and explore different options. Don’t make a decision on your own, especially if you’re under emotional stress.
• Understand the Consequences: Each option has implications for your credit score and financial situation as a whole. Make sure you understand the pros and cons of each option you are being given.
• Create a Budget: Regardless of the chosen path, creating and sticking to a budget is crucial for long-term financial health. A credit counselling nonprofit can help you create a budget and offer some tips to avoid this situation from happening again in the future.

Government Resources

• Alberta Supports: Provides emergency financial assistance for essential needs like food, shelter, and medication.
• Government of Canada Debt Resource: Learn options directly from the Federal Government.
• Orderly Payment of Debts (OPD) Program: Available in Alberta and Nova Scotia, an OPD is a federally legislated program offered by Money Mentors to help you repay government debts.

NOTE: There’s no one-size-fits-all solution. The best option depends on your specific financial situation and goals.