Families Change Guide to Separation & Divorce

2.20 - Debt Resolution

2.20 - Debt Resolution

It is important to manage debt well. After separation, most couples find that there are more expenses, but not more income. Whenever possible, it is best to pay debt off. When this is not possible, there are many steps you can take to help manage your debt.

  • Consolidate your debt into one loan.
  • Use a combination of reducing and eliminating non-essential expenses to pay down debt.
  • Approach creditors directly to initiate a payment plan that works for you.
  • Use credit counseling to get a debt management plan, with a credit counselor arranging a payment plan that you can afford. Understand that some creditors will not co-operate with credit counselors. Be careful to determine the fees charged.
  • Arrange a lump sum cash settlement with creditors. Some creditors will take a cash payout and eliminate the debt. For example, some may accept that you make one payment of 50% of the total amount.
  • Get financial assistance to make a consumer proposal, a commercial proposal or to file for bankruptcy. These are legal solutions available under the United States Bankruptcy Code for debtors who cannot pay their debts. Each of these options has it owns guidelines and outcomes, so it is important to get professional help.

The Resources section provides more information about agencies and services that can help you resolve debt issues.