Debt Relief Options in Alberta - How to Choose One

In Alberta, many families feel the pinch from rising interest rates, higher living costs, or sudden emergencies. Debt often builds quietly, until it feels impossible to manage. If you’re living in Edmonton or Calgary and juggling credit card bills, car payments, and overdue utilities, you’re not alone. Many Albertans are facing the same uphill battle. Whether through daily expenses, rising interest rates, or sudden emergencies, debt can slip into life quietly and suddenly. For many Albertans, that constant pressure makes it hard to think about anything else. If this sounds familiar to you, know that you’re not alone, and help is available. Money troubles don’t define who you are, and they don’t last forever. There are proven paths to recovery, and learning your options is the first step toward taking back control.

The Big Picture: What Debt Looks Like Today

Canadians are carrying more debt than ever. At the start of 2025, non-mortgage debt per consumer reached about $21,859, driven largely by increased auto loans and sustained household credit usage.

In Alberta, the strain is even heavier. Average consumer debt in cities like Calgary and Edmonton hovers near $24,000, and delinquency rates are climbing, with a nearly 16 percent year-over-year increase in missed non-mortgage payments.

At the start of 2025, more Canadians turned to formal options like consumer proposals and bankruptcies to cope with unmanageable debt. Behind these numbers are individuals and families feeling the weight of growing financial pressures, but also discovering that they are not alone. This signals that practical and legal solutions exist, and more people are finding the courage to seek the help and relief they need.

Debt Relief Options: Your Choices, Explained

There’s no single solution that works for everyone. It’s important to know that understanding the options and how they fit your situation can help you make a confident decision.

1. Debt Management Plan (DMP)

A DMP is a voluntary program offered by credit counselling agencies. It combines your unsecured debts into one monthly payment, and in many cases, creditors agree to reduce or freeze interest charges.

Why it can help: Payments are designed to fit your budget, and you repay the full amount you owe in an organized way.

Things to keep in mind: A DMP isn’t legally binding, so collection actions can still continue. Interest relief depends on each creditor’s policy.

2. Debt Consolidation

Debt consolidation is the process of merging multiple debts into one loan, usually at a reduced interest rate.

Why it appeals: Fewer bills to track, one predictable payment, and potentially lower interest costs.

Things to keep in mind: You’ll need good credit to qualify for the best rates, and it doesn’t reduce the total debt as you’re still repaying it in full.

3. Consumer Proposal

A consumer proposal is a legal process, managed by a Licensed Insolvency Trustee (LIT), where you offer to repay part of your debt over a period of up to five years.

Why it can work:

• Protects your assets, like your home or car, as long as you keep up with related payments.

• Provides immediate legal protection such as stopping collection calls, wage garnishments, and lawsuits.

• Less lasting impact on your credit than bankruptcy: an “R7” rating typically remains for three years after completion.

Things to keep in mind:

• Creditors must agree to your proposal.

• Missing three months of payments can cancel the agreement.

• There are administrative costs, and the proposal is a matter of public record.

4. Bankruptcy

Bankruptcy is a legal process under federal law in which certain non-exempt assets are sold to repay creditors, and you receive a discharge of your remaining eligible debts once your duties are met.

Why it can help: Often the fastest route to a fresh start, which can typically take 9 to 21 months.

Things to keep in mind:

• You may have to surrender some assets.

• The credit impact is more severe: an “R9” rating stays on your report for up to six years (or more, depending on province and circumstances).

Why Many Albertans Lean Toward Consumer Proposals

Consumer proposals are now one of the most commonly chosen alternatives to bankruptcy. Many people are drawn to this option because it allows them to protect their home or other important assets while committing to a repayment plan they can realistically manage. A consumer proposal offers both legal protection from creditors and a structured, respectful way to address debt to provide relief while preserving a sense of dignity and control.

Finding Your Way Forward with Compassion

Debt isn’t a moral failing. It’s often a response to life’s storms: illness, inflation, job cuts, family changes. What matters most is finding a path that supports your peace of mind now, and your financial health tomorrow.

Here are a few steps to take:

• Talk to a Licensed Insolvency Trustee: They can explain your options: DMP, consumer proposal, or bankruptcy in detail and gently guide you forward.

• Ask about credit counselling, whether through the Trustee or trusted agencies. Many proposals include mandatory counselling sessions.

• Gather your numbers: Add up your debts, monthly income, and essential expenses. Knowing these figures will help shape a realistic solution.

• Think beyond today: A plan that protects your assets, rebuilds credit, and reassures your mental health can be worth far more than a quick fix.

Your Next Step Starts Now

Don’t wait for another overdue notice or sleepless night to push you into action. SCB Debt Solutions has helped countless Albertans break free from the weight of unmanageable debt without judgement and with strategies that work in real life.

Whether you need guidance on a consumer proposal, debt consolidation, or exploring every possible alternative, our Licensed Insolvency Trustees will walk beside you each step of the way. Our licensed Insolvency Trustees will review your situation and guide you to the best debt relief option for your life in Alberta.

Book your free confidential assessment with SCB Debt Solutions today.

Common Questions Related to Debt Relief in Alberta

Does debt relief hurt your credit?

Most debt relief options will influence your credit, but the effect varies depending on the option you take. For example, a consumer proposal usually shows on your report for three years after completion, while bankruptcy can stay for up to six years. A Debt Management Plan can affect your credit too, but less severely.

The important thing to remember is that these options also give you a chance to stop the cycle of missed payments, collections, and rising debt. In the long run, debt relief can actually help you rebuild your credit by giving you a fresh start.

How to clear $30,000 debt fast?

The best approach depends on your income, expenses, and the type of debt. If your credit is strong, you could combine your debts into a single loan with a lower interest rate, making it easier and faster to pay off. If your debt feels unmanageable, a consumer proposal could reduce what you owe and set up affordable monthly payments with legal protection from creditors. For some, bankruptcy is the fastest way to clear debt, though it has a stronger impact on credit. Talking to our Licensed Insolvency Trustee can help you see which option clears your debt the quickest while protecting your future financial health.