Who should I contact if I'm in debt in Quebec?

Are you having trouble keeping track of your payments, your credit cards are overflowing and you're getting more and more calls from creditors? Rest assured, there are a number of reliable resources in Quebec to help you regain control of your finances.

5 Signs You Have a Debt Problem

Before the situation becomes too serious, there are certain signs that your finances may be out of balance. By spotting them early, you can act quickly and prevent debts from piling up any further.

1. Repeated delays in payments: bills, credit cards or loans that are no longer paid on time.

2. Use of credit for basic expenses: petrol, groceries, medicines... a clear sign that the budget is no longer enough.

3. Constant financial stress: worry at every phone call or letter, loss of sleep, anxiety about creditors.

4. Difficulty paying the minimum required: you barely repay the interest without bringing down the balance of your debts.

5. Feeling like there's no end in sight: despite your best efforts, debts increase or stagnate, and you lose hope of paying them off completely.

If you recognise several of these signs, it's time to consult a financial recovery advisor or a licensed insolvency trustee. A simple, free meeting may be all it takes to put your situation back in order.

Who can help you with debt in Quebec?

No matter what your situation, the important thing is not to be alone. In Quebec, there are several reliable and accessible resources that can help you get out of debt.

1. Recognised aid organisations

Resources such as ACEFs, Option Consommateurs and other regional community organisations offer free or low-cost budget support.

They can help you to :

• understand your debts better,

• plan a balanced budget,

• and develop better financial habits.

These organisations are often the first port of call before consulting a trustee or a financial recovery advisor.

2. The financial recovery advisor

The financial recovery advisor intervenes when the situation is more serious but still reversible. Their role is to analyse your income, debts and expenditure and draw up a personalised recovery plan.

He works in collaboration with a licensed insolvency trustee and always seeks to avoid bankruptcy when a repayment solution is possible.

3. The Licensed Insolvency Trustees (LITs)

The Licensed Insolvency Trustees is the only professional recognized by the Government of Canada to administer legal insolvency proceedings.

It can :

• filing a consumer proposal,

• managing personal bankruptcy,

• or simply assessing your situation to find the best strategy.

The consultation is free and confidential, and you benefit from immediate protection against appeals and recourse by your creditors as soon as you file a proposal.

What can be done to avoid bankruptcy?

Bankruptcy is never the only option. In Quebec, a number of solutions exist to reduce your debts, lower your payments and return to financial stability without losing everything.

1. The consumer proposal

The consumer proposal is a legal agreement between you and your creditors.

It allows you to repay only part of your debts, interest-free, over a maximum period of 5 years. The advantage is that you keep all your assets (house, car, RRSP, etc.).

This is often the most advantageous alternative to bankruptcy, as it immediately puts an end to collection calls and accumulated interest.

2. Debt consolidation

The debt consolidation consists of consolidating several debts (credit cards, personal loans, lines of credit, etc.) into a single monthly payment at a reduced interest rate.

This simplifies the management of your finances and relieves the stress of multiple payments.

Mistakes to avoid when in debt

When you feel overwhelmed by your debts, it's easy to do things that, instead of helping, actually make your financial situation worse. Here are the most common mistakes to avoid making your problems worse:

• Withdrawing your RRSPs to pay off your debts : This may seem like a quick solution, but it often results in significant tax penalties and jeopardises your retirement income. Your RRSPs are generally protected in the event of insolvency, so it's best to keep them.

• Avoiding calls from creditors : Avoiding your creditors only delays the problem. By talking to them or going through a licensed insolvency trustee, it is often possible to negotiate an arrangement before they take any legal steps.

• Recourse to very high rate loans : Private loans or payday loans may appear to offer respite, but their rates often exceed 30% to 40%, making the debt even harder to repay.

• Waiting too long to ask for help : The longer you wait, the more interest and fees add up. Consulting a syndic quickly allows you to act before the situation becomes critical.