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How Legal Debt Relief
Actually Works(The Complete Process)

If you're researching debt relief options, you've probably seen a lot of vague claims and confusing jargon. "Reduce your debt!" "Get relief fast!" But nobody explains how it actually works. Here's the full breakdown — no sales pitch, no fluff, just the real process from start to finish.

What Legal Debt Relief Actually Is

Legal debt relief is a federally regulated process where a debt professional negotiates with your creditors to reduce what you owe. You pay back a fraction of your debt (often 20-40 cents on the dollar) over a maximum of 6 years. The rest is legally forgiven.

It is NOT:

  • A Loan:You're not borrowing more money to pay off old money.
  • Debt Consolidation:You're not just moving debt around; you're reducing the total.
  • A Payment Plan:You are not paying 100% of what you owe.
  • Bankruptcy:Your credit recovers faster, and you keep your assets.

The Step-by-Step Process

1

Free Confidential Assessment

What Happens:

You talk to a federally-licensed debt professional. This isn't a sales call. It's a fact-finding conversation. They need to understand your debts, income, expenses, and assets.

What You'll Learn:

  • • Whether you qualify
  • • How much your debt could be reduced
  • • What your monthly payment would be
Time Required15-30 minutes
Cost$0. Completely free. No obligation.

Remote Friendly: Phone, video call, or in-person.

2

The Proposal Is Filed

If you move forward, the professional files a legal proposal. This outlines how much you offer to pay (e.g., $15k on a $50k debt) and the timeline.

Legal Protection Kicks In Immediately

This is called a "Stay of Proceedings." From the moment we file:

  • Creditors cannot call you
  • Wage garnishment stops
  • Lawsuits are halted
  • Interest freezes
3

Creditors Vote

Creditors have 45 days to vote. If creditors representing 50% of your debt value vote yes, everyone is bound by the deal.

The "Majority Rules" Example:
  • Visa ($20k) Votes YES
  • Mastercard ($15k) Votes YES
  • Payday Loan ($10k) Votes NO

Result: 77% Voted Yes. The Payday Loan company is forced to accept the deal.

*Over 80% of proposals are accepted because creditors prefer getting something over getting nothing in a bankruptcy.

4

Make Your Payments

You make one monthly payment to the debt professional. They distribute the money.

  • No Interest Charges
  • Set timeline (4-6 years typically)
  • Can be paid off early without penalty
5

Debt Forgiven

Certificate of Completion

Once payments are done, you get this legal document. The remaining debt is erased forever. Creditors can never pursue you again.

Credit Impact

Rated as R7 (better than bankruptcy). Stays on report for 3 years after completion. You can start rebuilding credit immediately during the process.

What Debts Can Be Included?

Included (Unsecured)

  • Credit card debt
  • Personal loans & Lines of credit
  • Payday loans
  • CRA Tax debt & GST/HST
  • Old Student Loans (7+ years)
  • Utility & Phone bills

Excluded (Secured/Legal)

  • Mortgages (Secured)
  • Car Loans (Secured)
  • Recent Student Loans (<7 years)
  • Child Support / Alimony
  • Court Fines
  • Fraud-related debts

Who Qualifies?

You are likely a good candidate if:

  • You owe $10,000+ in unsecured debt
  • You can afford a monthly payment
  • You want to keep your house/car

The Income Question

You don't need to be rich. You just need something reliable. People on disability, pensions, part-time work, or seasonal work often qualify if the numbers make sense.

Common Questions

Ready to See If You Qualify?

The process starts with a free, confidential consultation. No obligation. No pressure. Just clarity.

Check Your Eligibility