Mounting consumer debt is a huge issue for many residents of Alberta. Life events such as job loss, health challenges, or sudden financial emergencies can make it difficult to cover everyday expenses.
Thankfully, there are a variety of debt relief strategies available in Alberta to help individuals regain financial stability. Let’s go into more detail about some of the more common debt solutions that might help you better manage your debt.
What Debt Relief Options Are Available In Alberta?
Depending on your financial circumstances, one of the following options could be suitable for you:
- Debt Consolidation Loan: A debt consolidation loan allows you to merge multiple debts into one new loan, often with a lower interest rate. It simplifies your repayment process by replacing several bills with a single monthly payment, potentially reducing the total interest you pay.
- Debt Consolidation Program: Facilitated by a credit counsellor, a debt consolidation program combines your outstanding balances into one manageable payment without requiring a new loan. A credit counsellor works directly with your creditors to negotiate terms that ease your repayment burden.
- Consumer Proposal: A consumer proposal is a formal agreement between you and your creditors to repay a portion of your debt over a set timeframe. Once accepted, it puts the brakes on collection efforts and interest charges. You can also keep your assets while settling your obligations for less than the full amount owed.
- Bankruptcy: As a last resort, bankruptcy offers legal protection from unsecured debts and stops wage garnishments and collection calls. However, it may result in the loss of certain assets and can significantly affect your credit rating.
| How Does Your Debt Load Compare To The Average In Alberta? In Q1 of 2025, the average non-mortgage debt in Alberta reached $24,398 per consumer, an increase of 1% compared to the previous year. This rise is largely attributed to soaring housing costs, inflation, and stagnant wages. Evaluating your own debt against this provincial average can help you assess your financial health. If your debt load is considerably above the average, it may be time to seek out professional help or consider one of the relief options mentioned above. |
Learn more: Debt Relief Programs In Canada: What Are Your Options?
Looking For Help With Your Debt?
If managing your debt has become almost impossible on your own, it may be time to seek professional assistance. Many credit counselling organizations are available in Alberta to help you build a realistic repayment plan, organize your finances, and explore solutions that fit your situation.
For more severe financial challenges, filing for bankruptcy or submitting a consumer proposal may be necessary. For these programs, consult a Licensed Insolvency Trustee (LIT), who is legally authorized to administer these types of debt relief processes.
| Are Credit Counsellors Regulated In Alberta? Unlike Licensed Insolvency Trustees, credit counsellors in Alberta are not required to have a specific license. However, many work under recognized non-profit agencies and follow ethical standards to support clients effectively. |
Finding Debt Help In Alberta
If you’re ready to take control of your financial situation, there are several agencies available across Alberta that can assess your circumstances and recommend the most appropriate path forward.
Below are some resources to consider when exploring debt relief options:
| Agency | Services | |
| Consolidated Credit | Credit counselling Debt management Debt consolidation Consumer proposal Bankruptcy | Learn More |
| 4 Pillars | Credit counselling Credit rebuilding Debt consolidation Consumer proposals Bankruptcy | Learn More |
| Money Mentors | Credit counselling Debt consolidation Orderly Payment of Debts (OPD) | Learn More |
| BDO Debt Solutions | Debt counselling Consumer proposals Bankruptcy | Learn More |
Where Else Can I Find Help?
Use these online resources to find a credit counsellor or LIT near you in Alberta:
Debt Consolidation Loans
Debt consolidation loans offer a practical way to manage multiple outstanding balances by rolling them into one new loan. This approach streamlines your monthly payments and may lower your overall interest costs compared to managing several separate loans.
Types Of Loans Used For Consolidation
The following loan options may be used to consolidate your debt:
- Personal Loans: These loans provide a lump sum that you repay over time in fixed monthly installments. Secured personal loans, backed by collateral, often come with lower interest rates and higher borrowing limits. Unsecured personal loans don’t require collateral, but may carry higher rates due to increased lender risk.
- Home Equity Loans/Second Mortgages: Homeowners can tap into their property’s equity to consolidate debt through a second mortgage. These loans typically offer lower interest rates than unsecured options, making them a cost-effective solution for larger balances.
- Balance Transfer Credit Cards: If you’re carrying substantial credit card debt, a balance transfer credit card may be considered. With this option, you would transfer your high-interest balances to a card with a promotional 0% or reduced interest rate, which can significantly cut interest costs. Just be sure that the balance is paid off within the promotional window.
| Impact On Your Credit Score Applying for a debt consolidation loan may cause a temporary dip in your credit score due to the hard inquiry during the application process. Plus, closing old accounts after consolidation can affect your credit mix and average account age. However, consistent on-time payments on the new loan can lead to long-term improvements in your credit profile. |
Debt Management Program (DMP)
A debt management program is a structured repayment plan arranged through a credit counsellor. It consolidates your unsecured debts into one monthly payment, often with reduced interest negotiated by the counsellor. While it doesn’t eliminate debt, it helps make repayment more manageable without the need to take on more debt.
Debt Settlement
Debt settlement involves negotiations with creditors to accept a payment amount that’s less than the full amount you owe. This option is typically used when you’re unable to keep up with regular payments and want to avoid bankruptcy. It can impact your credit score and may involve fees, but it offers a way to resolve your debt for less than the full balance.
Learn more: Debt Settlement
Consumer Proposal
A consumer proposal is a formal agreement filed through a Licensed Insolvency Trustee, allowing you to repay a portion of your debt over time. Once accepted by creditors, it stops collection actions and interest charges, without the need to give up your assets.
Bankruptcy
Bankruptcy is another formal process that provides relief from most unsecured debts when you’re unable to repay them. It’s administered by a Licensed Insolvency Trustee and immediately halts wage garnishments and collection calls. However, it has a severe effect on your credit score and may require surrendering certain assets, which is why it should only be considered as a last resort.
Key Things To Consider Before Seeking Debt Help
Before choosing a debt relief strategy, it’s important to understand your rights, recognize potential risks, and be aware of any costs involved.
What Are My Consumer Rights?
In Alberta, debt collection practices are regulated under the Consumer Protection Act (CPA), which outlines how creditors must operate. Debt collectors are required to hold a valid license and must treat consumers fairly, which means no harassment, false claims, or contact outside permitted hours.
If you believe a creditor has treated you unfairly, you can reach out to Service Alberta’s Consumer Investigations Unit (CIU), which will look into potential breaching of consumer protection laws by debt collectors.
- Telephone: 1-877-427-4088
- Email: cs@gov.ab.ca
How Do I Avoid Scams?
While many credit counselling services are legitimate, some dishonest agencies may try to exploit people in financial distress. Be wary of agencies that demand upfront fees, guarantee instant debt elimination, pressure you to sign quickly, or ask for sensitive financial details over the phone.
To protect yourself, do the following:
- Check online reviews from past clients
- Confirm the agency’s address and phone number
- Never share personal financial data until you’ve verified them
What Fees Will I Be Charged?
Some counselling agencies offer free initial consultations, but ongoing services may come with costs, so be sure to ask for a full breakdown upfront. LIT fees are regulated by the government and typically included in the debt solution itself, so separate payments are rarely required.
Learn more: Debt Relief Guide
Additional Financial Support Options In Alberta
Beyond the assistance provided by the provincial government, Alberta residents have access to a range of community-based programs that can help with essential living costs such as housing, utilities, food, and child care.
Utility Support
Albertans facing potential disconnection of their utility services due to unpaid bills may receive help through the Utilities Consumer Advocate (UCA). This organization works on behalf of consumers to work with utility providers and help ensure there are no interruptions to these vital services.
Food Banks
An increasing number of Canadians are finding themselves unable to cover the cost of groceries. If you fall under this category, there are several food banks across Alberta that can help, including the following:
- Calgary Food Bank: 5000 11 St SE, Calgary, AB T2H 2Y5
- Edmonton Food Bank: 11508 120 St NW, Edmonton, AB T5G 2Y2
- Airdrie Food Bank: 20 East Lake Way NE, Airdrie, AB T4A 2J3
Emergency Shelters
If you’re at risk of homelessness or are in between housing due to financial constraints, several emergency shelters may provide you with temporary housing until you get back on your feet:
- Alpha House: 203 15 Ave SE, Calgary, AB T2G 1G4
- The Salvation Army – Centre of Hope: 420 9 Ave SE, Calgary, AB T2G 0E7
- Inn from the Cold: 706 7 Ave SW #110, Calgary, AB T2P 0Z1
Free Clothing
Covering the cost of clothing can be quite expensive, especially when it comes to clothing children and gearing up for colder seasons. If you’re struggling to pay for these essential items, a handful of centres are available throughout Alberta that offer gently used clothing at no cost:
- Society of Saint Vincent de Paul: 11531 120 St, Edmonton, AB, T5G 2Y4
- Mill Woods Care Closet: 8704 Millwoods Road NW, Edmonton, AB T6K 3J3
- Terra Centre: 10320 146 St NW, Edmonton, AB T5N 3A2
FAQs On Debt Relief In Alberta
Can I consolidate debts if I have bad credit?
Can credit counselling help with debt?
Can debt consolidation affect your credit score?
What types of debts can be consolidated?
How does a consumer proposal work?
®Fairstone Financial Inc. is a wholly owned subsidiary of Fairstone Bank of Canada.
*Interest rates are subject to change. Actual Annual Percentage Rate (APR) varies based on the province of residence and individual factors like credit details and loan amount. The interest rate on an unsecured personal loan is 31.99% in BC.
Fairstone Financial Inc. holds high-cost credit licenses in AB, MB (License #85047, expiring 20-02-2026) and QC; it has applied for a high-cost credit grantor license in NL. For license information by province, visit Fairstone.ca/HCCG
