Self service solutions

Contact your creditors

Explain why you can’t make your payments and suggest an arrangement that might work for you and your creditors. You might be surprised to find that several creditors are willing to cooperate. Be aware, however, that even if you manage to come to an agreement with the majority of your creditors, any creditor who does not agree with the proposed agreement retains all the usual civil remedies to collect his debt, namely judgment and execution of judgment by seizure of wages, furniture, or building, a situation that could prevent you from respecting the agreements made with other creditors.

Consolidation loan

You can contact a bank or other financial institution to consolidate your debts into one loan. This creditor will pay off all of your debts, and in return, you will make a monthly payment to that single creditor. Take the time to “shop around” for your loan, as interest rates can vary widely. Avoid new purchases on credit; this could compromise your fragile situation.

Voluntary deposit

In Quebec, voluntary deposit is a procedure administered by officials of the Ministry of Justice. Once the procedure has started, you will deposit the garnishable portion of your salary each week at the courthouse in your locality and an official will distribute it every three months to the creditors concerned. You do not have the option of modulating the payment according to your ability to pay, as in a consumer proposal. It is a rigid system which greatly limits its usefulness. As long as you respect the commitment (ie deposit the garnishable part of your salary), the creditors will not have the right to seize you otherwise. Your debts continue to bear interest at the rate of 5% and your creditors must be repaid in full.