# How do I find debt help in Canada without getting ripped off?

> Credit counsellors, licensed insolvency trustees and debt consultants can sound alike online. Here's how to tell them apart, check who you're dealing with, spot red flags and start with help that costs nothing.

Published November 2, 2026 · Topic: Borrowing & Debt · Audience: employees

Canonical URL: https://mybuffer.ca/blog/find-debt-help-canada-without-getting-ripped-off

## Key takeaways

- Only licensed insolvency trustees (LITs) can administer consumer proposals and bankruptcies. They're federally regulated, and the first consultation is typically free.
- Credit counsellors can help with budgets and debt management plans. Check that the agency is in good standing with an association such as Credit Counselling Canada, and ask about fees in writing.
- Many debt consultants and advisors are unregulated. Be wary of fast fixes, credit score promises, government program claims, high upfront fees or fees just to connect you with an LIT.
- Start with free options: call your creditors, talk to a non-profit credit counsellor and book a free first meeting with an LIT.

When debt starts to feel like too much, most people do the same thing first. They search online. What comes back is a jumble of ads, companies promising relief, non-profit agencies and licensed professionals, often sitting side by side with nothing to tell you which is which.

That isn't just your impression. In March 2026, [Prosper Canada](https://learninghub.prospercanada.org/wp-content/uploads/2026/10/debt-help-roundtable-insights-report.pdf) brought together more than 20 debt help stakeholders from community groups, government and business to look at how Canadians find help. Its report sums up the problem in one line: "It is easy for consumers to access low-quality, misleading, and costly debt help, and hard to access affordable, trustworthy, and appropriate help."

You're also far from alone in looking. Canadians filed 140,457 consumer insolvencies in 2025, up 2.3% from 2024, according to the [Office of the Superintendent of Bankruptcy](https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/statistics-and-research/insolvency-statistics-canada-december-2025) (OSB). In BC, consumer filings rose 10.6% to 15,331.

This guide won't tell you which debt option is right for you. That depends on your whole situation, and it's a conversation for a qualified professional. What it will do is help you work out who you're talking to, what they can and can't do, and when to walk away.

## Who's who in debt help

Three kinds of help come up again and again. They can sound alike, but they work very differently.

**Credit counsellors.** A credit counsellor helps with budgeting and can set up a debt management plan. According to the [Financial Consumer Agency of Canada](https://www.canada.ca/en/financial-consumer-agency/services/debt/debt-help.html) (FCAC), that's an informal deal where the counsellor asks your creditors to lower or drop interest, and you make one monthly payment to the agency. You'll usually still repay 100% of what you owe, and creditors don't have to agree. Both non-profit and for-profit agencies offer credit counselling, and FCAC notes counsellors aren't legally required to have specialized training. Provincial and territorial governments regulate credit counselling agencies and handle complaints about them.

**Licensed insolvency trustees (LITs).** LITs are licensed and overseen by the OSB. The OSB says [they're the only professionals](https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/you-owe-money/what-licensed-insolvency-trustee) authorized to administer consumer proposals and bankruptcies, and they're required to look at your situation and discuss all your options, including ones that don't involve insolvency at all. They typically don't charge for the first consultation, and their fees for consumer insolvencies are regulated by the federal government. Meeting one doesn't commit you to filing anything.

**Debt consultants and advisors.** These go by many names, like debt relief company, debt consultant or debt advisor. Prosper Canada's report says many are unregulated, aren't held to any qualification or practice standards, and aren't licensed to administer consumer proposals or bankruptcies. It also found there are no provincial frameworks governing debt advisory services, so there are no education requirements, service standards or fee caps. The [OSB warns](https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/you-owe-money/how-avoid-paying-unnecessary-fees-your-debt) that some charge "hundreds or even thousands of dollars" for debt relief they aren't authorized to provide or that you don't need.

![Comparison chart of three kinds of debt help in Canada: credit counsellors, licensed insolvency trustees, and debt consultants or advisors, showing who oversees them, what they can do, what they cost, and how to check them.](https://mybuffer.ca/blog/media/zrmtRiD7iZur/buf015-fig1-1200.webp "Figure 1. Who's who in debt help in Canada. Based on information from the Financial Consumer Agency of Canada, the Office of the Superintendent of Bankruptcy, Prosper Canada and Consumer Protection BC.")

## How do I check who I'm talking to?

Start with a direct question: are you a licensed insolvency trustee? Prosper Canada's report says some debt advisors present themselves as LITs, and some charge fees just to connect people with one. If someone says yes, you can look them up in the OSB's [Licensed Insolvency Trustee directory](https://www.ic.gc.ca/app/scr/tds/web). If they're not an LIT, ask what they'd charge you for, and why. As the OSB puts it in its guide to [spotting sketchy debt advice](https://www.ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/you-owe-money/how-spot-sketchy-debt-advice), "You don't need to pay another advisor to find or consult an LIT."

For a credit counselling agency, FCAC suggests checking that it's in good standing with a provincial or national association, such as [Credit Counselling Canada](https://creditcounsellingcanada.ca/) or the Canadian Association for Financial Empowerment, and looking for complaints about it. Then ask a few plain questions before you sign anything:

- Is the first consultation free?
- Will you give me a written proposal describing how you'll help?
- What fees will I pay, including set-up, monthly and per-creditor fees?
- Will I get monthly statements showing my payments to creditors?
- What training and experience does my counsellor have?

FCAC also suggests comparing the agency's fees with what you'd save in interest. If the fees are higher, the plan may not be worth it.

If you live in BC, there's one more check. A business that acts for you in arrangements or negotiations with your creditors for a fee needs a licence from [Consumer Protection BC](https://www.consumerprotectionbc.ca/consumer-help/debt-repayment/), and you can [check a licence](https://www.consumerprotectionbc.ca/check-a-licence-search/) on its website.

## Red flags that should make you pause

FCAC and the OSB list the same warning signs again and again. Be careful if someone:

- promises to solve your debt problems quickly for a fraction of what you owe
- promises to fix your credit score fast (accurate information can't be removed from your credit history, and rebuilding takes time)
- says their service is part of a government program
- pushes you to sign right away
- charges high fees up front, or fees you'd still owe even if your creditors refuse to negotiate
- suggests a credit card advance or a high-interest loan to pay their fees
- is slow to pay your creditors with the money you've sent them
- charges you a fee just to connect you with an LIT

The OSB's [consumer alert](https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/your-debts-are-getting-out-control) names high fees, high interest rates, delayed payments and pressure to borrow more to pay the advisor as signs of trouble. FCAC adds that a legitimate agency should never try to coerce you into using its services.

![Checklist of eight red flags when looking for debt help, such as promises to fix your credit score fast, claims of a government program, pressure to sign, high upfront fees, and fees just to connect you with a licensed insolvency trustee.](https://mybuffer.ca/blog/media/GACHKEEOo00Y/buf015-fig2-1200.webp "Figure 2. Red flags when looking for debt help. Based on warnings from the Financial Consumer Agency of Canada, the Office of the Superintendent of Bankruptcy and Prosper Canada.")

## What is a consumer proposal, in plain terms?

A lot of debt relief advertising is really about consumer proposals, so it helps to know the basics. According to the [OSB](https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/you-owe-money/you-owe-money-consumer-proposals), a consumer proposal is a formal, legally binding process administered by an LIT. You offer to pay your creditors part of what you owe, ask for more time to pay, or both. It's available if your total debts are no more than $250,000, not counting a mortgage on your principal residence, and it can't run longer than five years.

Once it's filed, wage garnishments and lawsuits by your unsecured creditors stop. You'll attend two counselling sessions, and the OSB says the proposal stays on your credit record for its term plus another three years. It's a serious step with real trade-offs, which is exactly why the person explaining it should be someone licensed to do it.

If someone who isn't an LIT says they'll file a proposal for you, they can't. At most, they'll pass you along to an LIT, sometimes for a fee you didn't need to pay.

## Start with the help that costs nothing

You don't have to pay anyone to get a clear picture of your options.

- **Call your creditors.** The OSB says most credit issuers in Canada have programs that can give you a payment break or lower your minimum payments.
- **Talk to a non-profit credit counsellor.** FCAC says simply talking to one won't affect your credit score.
- **Book a first meeting with an LIT.** It's typically free, and they're required to walk you through all your options.

Get a second opinion if something feels off. Debt help that's worth having will leave you feeling clearer about your choices, not rushed into one.

## Where a small loan fits, and where it doesn't

Borrowing isn't debt help. If you're already behind on payments, a new loan can move the problem around rather than solve it. The OSB also warns about debt advisors who push people toward credit card advances or high-interest loans to pay their fees. We look at this in more detail in [Will a small loan fix my money problem?](https://mybuffer.ca/blog/will-a-small-loan-fix-my-money-problem)

Buffer offers small loans to employees as a workplace benefit. They're meant for a one-off cost, like a car repair, when your budget otherwise works. They're not a way out of debt you can't keep up with, and approval isn't guaranteed. If you want to understand the cost of any small loan before you borrow, see [What will a small loan cost me?](https://mybuffer.ca/blog/what-will-a-small-loan-cost-me) And if you'd like a cushion for next time, here's [how to start an emergency fund when your paycheque is already spoken for](https://mybuffer.ca/blog/start-emergency-fund-when-paycheque-spoken-for).

> Loans are subject to eligibility and approval. Typical loan amounts are $100–$1,500, with 1–6 month repayment terms and 12%–18% APR. No interest is charged if an eligible employee repays in full within the one-time 29-day repayment period. Borrowing creates a repayment obligation.

This article is general information, not financial or legal advice. Buffer is not affiliated with or endorsed by the Office of the Superintendent of Bankruptcy, the Financial Consumer Agency of Canada, Consumer Protection BC, Credit Counselling Canada or Prosper Canada.

## Questions and answers

### Do I have to pay to talk to a licensed insolvency trustee?

Usually not. The OSB says licensed insolvency trustees typically don't charge for a first consultation, and you don't need to pay another advisor to find or consult one. You can look them up in the OSB's Licensed Insolvency Trustee directory.

### Will talking to a credit counsellor hurt my credit score?

No. According to the Financial Consumer Agency of Canada, talking to a credit counsellor won't affect your credit score. A consumer proposal is different: the OSB says it stays on your credit record for its term plus 3 years.

### How do I check if someone is a licensed insolvency trustee?

Ask them directly, then search their name in the OSB's Licensed Insolvency Trustee directory. Some advisors present themselves as trustees when they aren't, so check before you share details or pay anything.

### Can a debt consultant file a consumer proposal for me?

No. Only a licensed insolvency trustee can administer a consumer proposal or bankruptcy. A consultant who charges you to prepare one, or to pass you on to a trustee, is charging for something you can get directly, usually with a free first meeting.

## Sources and references

1. [Debt Help Roundtable insights report](https://learninghub.prospercanada.org/wp-content/uploads/2026/10/debt-help-roundtable-insights-report.pdf) · Prosper Canada
2. [Getting help from a credit counsellor](https://www.canada.ca/en/financial-consumer-agency/services/debt/debt-help.html) · Financial Consumer Agency of Canada
3. [How to avoid paying unnecessary fees for your debt](https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/you-owe-money/how-avoid-paying-unnecessary-fees-your-debt) · Office of the Superintendent of Bankruptcy
4. [How to spot sketchy debt advice](https://www.ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/you-owe-money/how-spot-sketchy-debt-advice) · Office of the Superintendent of Bankruptcy
5. [What is a Licensed Insolvency Trustee?](https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/you-owe-money/what-licensed-insolvency-trustee) · Office of the Superintendent of Bankruptcy
6. [Consumer proposals](https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/you-owe-money/you-owe-money-consumer-proposals) · Office of the Superintendent of Bankruptcy
7. [Your debts are getting out of control](https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/your-debts-are-getting-out-control) · Office of the Superintendent of Bankruptcy
8. [Insolvency statistics in Canada, December 2025](https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/statistics-and-research/insolvency-statistics-canada-december-2025) · Office of the Superintendent of Bankruptcy
9. [Licensed Insolvency Trustee directory](https://www.ic.gc.ca/app/scr/tds/web) · Office of the Superintendent of Bankruptcy
10. [Debt repayment](https://www.consumerprotectionbc.ca/consumer-help/debt-repayment/) · Consumer Protection BC
11. [Credit Counselling Canada](https://creditcounsellingcanada.ca/) · Credit Counselling Canada

*Product facts in this article were supplied by Buffer Financial Inc. This article is general information, not personal financial advice or an offer of credit.*