In this guide
Can you get credit card debt relief in Canada?
Credit card debt relief options exist in Canada, but lenders won’t forgive your balance, nor are there government grants to pay off your credit cards. Instead, there are ways to help you manage the debt more easily or reduce what you owe.
Credit cards are the easiest kind of debt to deal with this way because nothing is secured against them. If you stop paying, the lender can’t repossess a house or car, so they have a reason to negotiate rather than write the balance off as a loss.
Signs you need credit card debt relief
You may need debt relief if you can only afford to make minimum payments, if you use one credit card to pay off another, or if you avoid checking your balance because it feels overwhelming. You’re likely feeling stressed, anxious or guilty about your debt.
Almost one in four Canadians expect only to make their minimum monthly credit card payments. With a high-interest credit card, the minimum payment usually goes mostly toward interest, so the balance can be hard to shift.
Source: Equifax Canada – Survey on minimum credit card payments, August 2026
If debt payments are eating into a large share of your take-home pay, if you’ve missed any credit card payments, if collection calls have begun, or if the stress is impacting your health, it’s wise to seek debt relief before your options narrow.
Credit card debt relief options in Canada
First, ask yourself whether you can pay off your credit cards on your own. List all your credit cards. For each one, check the balance, interest rate, minimum monthly payment, any annual fees, your credit limit, and how close you are to reaching it.
If you can pay more than the minimum each month, put any extra money toward the card with the highest interest rate while making the minimum payments on the rest. This is called the debt avalanche method, and it costs you the least in interest.
If that isn’t feasible, there are other ways to deal with credit card debt. Direct negotiation, a debt management plan, and an Orderly Payment of Debts can make the terms easier. A consolidation loan rolls multiple debts into one, while a settlement, a consumer proposal and bankruptcy can reduce the amount that you pay.
| Option | What happens to the balance | Typical credit impact | Best for |
|---|---|---|---|
| Negotiate with your card company | Interest paused or reduced, balance usually paid in full | Minor credit impact if payments stay current | Someone who is facing short-term hardship with one credit card |
| Debt management plan | Paid in full over 3 to 5 years, interest often waived | Noted on your credit report while active | Someone who needs relief from interest |
| Orderly Payment of Debts | Paid in full through the court at 5% interest, nothing forgiven | Recorded while in effect | Someone with steady income in a province that offers it |
| Consolidation loan | Roll all credit cards into one new loan, nothing forgiven | Credit impact depends on the new loan and your payments | Someone with good credit who wants to make one payment |
| Debt settlement | Lump sum clears debt for less than you owe | Credit impacted for years after | Someone who can raise a lump sum and is already behind |
| Consumer proposal | Settled for less than you owe, over a maximum period of 5 years | Credit impacted for years after | Someone with steady income who cannot repay the balance in full |
| Bankruptcy | Unsecured debt cleared | The most damaging to credit | Someone who has no realistic way to repay |
Get help from your credit card company
A hardship program is temporary relief offered directly by your credit card company, usually reduced interest or lower payments for a set period. Speak to your issuer and ask what they can do.
Many issuers can pause or reduce your interest for a few months or temporarily lower your payments, though few advertise it, so you have to ask directly. It won’t reduce what you owe, but it can help you keep your credit score intact as long as you keep up with your payments.
Credit counselling and a debt management plan
A debt management plan (DMP) combines your unsecured debts into one monthly payment through a non-profit credit counselling agency. This plan helps you pay off the full balance over three to five years.
Your credit counselling agency attempts to negotiate with your creditors to reduce or freeze your interest rates, and you make just one monthly payment to the agency.
Orderly Payment of Debts
An Orderly Payment of Debts is a court-supervised consolidation order under Part X of the Bankruptcy and Insolvency Act. It combines unsecured debts into one monthly payment with a reduced interest rate of 5% per year, well below what any credit card charges. You must repay the full amount borrowed, as no debt is forgiven.
Source: Justice Laws Website – Orderly Payment of Debts Regulations, section 31
An Orderly Payment of Debts (OPD) program is not available nationwide. It’s only available to residents of Alberta, Saskatchewan, Nova Scotia, and Prince Edward Island.
Since it’s not a bankruptcy, you keep your assets. However, it cannot eliminate any tax debts owed to the CRA.
Source: Justice Laws Website – Bankruptcy and Insolvency Act, Part X
Debt consolidation loan
Debt consolidation means taking out one new loan, line of credit, or balance transfer and using it to pay off your credit cards. You still owe the total amount, but now it’s to one lender, usually at a lower interest rate.
The plus side of a debt consolidation loan is its simplicity and structure. With a loan, you have a set payment and a date when it’s all paid off, while minimum payments on a card can stretch the same debt out for years. If you can consolidate at a lower interest rate, you’ll save both time and money, but this requires good credit.
Consumer proposal
A consumer proposal is a formal offer to your creditors, filed for you by a Licensed Insolvency Trustee, that lets you pay back a portion of your unsecured debt while the remaining balance is forgiven.
You combine your debts into one affordable monthly payment, eliminating interest, collection calls, and wage garnishments. You keep your assets, including your home and car.
Your creditors vote on whether to accept the agreement. If those who own more than half of the total debt agree, the decision will apply to all creditors.
The cost is based on your income, how much you owe and what you can afford to pay. Your credit rating takes a hit, but that is far less damaging than bankruptcy, and you keep your assets.
Source: Office of the Superintendent of Bankruptcy Canada – Consumer proposals
Bankruptcy
Personal bankruptcy is a legal process under the Bankruptcy and Insolvency Act where you give up some assets to get help with debts you can’t manage.
When you are discharged, most of your unsecured debts are eliminated, including credit card debt. A few survive a discharge, such as support payments, court fines, and student loans if you left school less than seven years ago.
Source: Justice Laws Website – Bankruptcy and Insolvency Act, section 178
If this is your first bankruptcy and your income sits below the government’s surplus income limit, you’re automatically discharged after nine months. If you earn more than $200 a month above that limit, you pay for longer, and it lasts 21 months instead.
Source: Office of the Superintendent of Bankruptcy Canada – Considering bankruptcy
Consumer proposals are much more common than bankruptcy. Of 145,681 consumer insolvencies in the 12 months ending July 31, 2026, 78.1% were proposals and 21.9% were bankruptcies.
Source: Office of the Superintendent of Bankruptcy Canada – Insolvency Statistics in Canada, July 2026
How to settle credit card debt yourself
You can contact your credit card company directly and propose a lump sum payment to settle the account for less than the full balance. This is known as informal debt settlement, whether you do it yourself or pay a company to do it for you.
Whether they accept depends on how far behind you are and the amount they can realistically expect to recover. Creditors have no legal obligation to comply. A creditor who expects to recover nothing may accept a partial payment, but settling the debt will still be recorded on your credit report.
Debt settlement companies are risky. The Financial Consumer Agency of Canada warns that some debt settlement companies charge fees even if your creditors refuse to settle, and that some deliberately delay your payments while they negotiate. Your credit can be damaged while you wait.
Source: Financial Consumer Agency of Canada – Debt settlement companies
You don’t have to go through a debt settlement company. You can call your creditors yourself.
Does credit card debt relief hurt your credit?
Most debt relief options impact your credit. Late and unpaid credit card accounts stay on your report for up to six years with both Equifax and TransUnion.
Source: Financial Consumer Agency of Canada – How long information stays on your credit report
A consumer proposal and bankruptcy are recorded as negative entries that are removed on fixed dates, rather than whenever your credit improves.
Both bureaus remove a consumer proposal from your credit report three years after you finish paying it, or six years from an earlier date, whichever comes first. Equifax counts those six years from the day you filed. TransUnion counts them from the day the account first went into default.
A bankruptcy appears on your credit report for longer. A first bankruptcy comes off six years after your discharge, or seven years on TransUnion if you’re in Ontario, Quebec, Prince Edward Island, or Newfoundland and Labrador. A second one appears on your credit report for fourteen years.
Sources: Equifax Canada – How long does information stay on my credit report?; TransUnion Canada – Frequently asked credit questions
A debt consolidation loan is essentially just a new credit account, so how it affects your credit depends on whether you pay it on time.
Frequently asked questions
Do I have to use a Licensed Insolvency Trustee?
You must use a Licensed Insolvency Trustee for a consumer proposal or bankruptcy, as they are federally regulated. You can arrange the rest yourself.
For hardship assistance, contact your credit card company. A non-profit credit counselling agency can help with a debt management plan, while you can apply for a debt consolidation loan from a bank or lender.
The Orderly Payment of Debts program is administered by designated provincial credit counselling agencies or local authorities. To settle a debt, contact your creditor directly.
How do I get rid of $30,000 in credit card debt?
The amount you owe is not the most important factor. What truly matters are your income, your assets, and what you can realistically afford to pay each month.
The same $30,000 debt might require one person to enter a repayment plan, while another might need to file for bankruptcy. A free consultation with a Licensed Insolvency Trustee can help you understand where you stand and which options you qualify for.
How long does credit card debt relief take?
How long credit card debt takes to resolve depends on the option you choose. A consumer proposal can last up to five years, while a debt management plan typically takes three to five years.
A first bankruptcy without surplus income usually takes nine months. In contrast, a settlement can be much quicker, sometimes resolved in a single call with a lump-sum payment.
Will credit card debt relief stop collection calls?
Only some of them do. Filing a consumer proposal or bankruptcy triggers a stay of proceedings, and that legally stops collection calls and court action on your unsecured debts. An Orderly Payment of Debts works similarly; once the consolidation order is issued, creditors cannot initiate court action against you.
The other options carry no legal protection. With a debt management plan, the calls usually stop once you start paying, and a consolidation loan ends them because the credit cards get paid off. Informal debt settlement can make things worse, as you may be behind on payments during negotiations.
Can I keep my credit cards if I get debt relief?
No. In a consumer proposal or bankruptcy, the cards are included in the filing and closed. Even a debt management plan will usually ask you to stop using them.
Get credit card debt help
If you’re juggling cards to pay each other, if debt payments are taking a large share of your income, if you’re missing payments, getting collection calls, or if debt stress is hurting your health or relationships, talk to a Licensed Insolvency Trustee.
The first consultation is free and confidential. You’ll go through what you owe, what you earn, and what you can realistically afford, and you’ll get a straight answer on which options you qualify for. That includes options that aren’t a consumer proposal or bankruptcy, because the right answer is often simpler.
