3. Make a debt repayment plan

You can create a debt repayment plan with a non-profit credit counsellor. A non-profit credit counsellor can speak to your creditors for you and may be able to negotiate lower payments and better terms.

Unlike a consumer proposal, a debt repayment plan is not a formal legal process. This means that your creditors don't have to follow the repayment plan if they don't want to.

With a debt repayment plan, your creditors can still legally call you and try to collect their money from you. But even though they can call you, your creditors will usually stop calling you about the money you owe once you have agreed to a plan with your counsellor.

If you can't get your creditors to agree to a debt repayment plan, you might want to think about filing a consumer proposal.

A debt repayment plan usually means that you:

• are charged less interest by creditors, or no interest at all
• are on the plan for a maximum of 5 years
• create a budget for yourself
• are not allowed to use credit until your debts are paid

Your debt repayment plan will appear on your credit report for 2 years after you finish paying back the money. After 2 years, no one will be able to see that you used a debt repayment plan.

The counsellor will only set up a debt repayment plan if you can afford it. Most plans are designed to let you keep a certain amount of money to live on while you repay your debts. You should make a plan that is realistic so that you make the payments you have agreed to.