In July 2025, Canada’s unemployment price hovered round 6.9%, with youth unemployment reaching 14.6%. Two in 5 Canadians say they’re fearful somebody of their family may lose their job, the best degree of job loss nervousness ever reported, in response to MNP. On the similar time, 42% of Canadians say cash has been their largest supply of stress this yr, and practically half are shedding sleep over it.
If you happen to’re in between jobs and fearful about the right way to cowl your payments, defend your credit score, or work out what sort of assist is obtainable, you’ve come to the proper place. On this article, we’ll stroll you thru the right way to prioritize funds, negotiate with collectors, and entry unemployment reduction packages so you may hold issues manageable when you seek for your subsequent alternative.
The primary 48 hours: Triage your funds
The primary few days after shedding your job can really feel overwhelming, however taking a couple of easy steps will help you regain a way of management.
Begin by adjusting your present finances or making a bare-bones finances that covers solely necessities: housing, utilities, groceries, telephone, web, transportation, and minimal debt funds. Consider any earnings you anticipate to have throughout this time, comparable to severance, emergency financial savings, or Employment Insurance coverage (EI). This provides you a transparent image of what you want and the place you may want to chop again.
Then, you’ll wish to prioritize your bills. Make housing your high precedence, which incorporates lease or mortgage and utilities, then add in primary meals prices and well being wants. Secured money owed (loans tied to property, comparable to a automobile) come subsequent, adopted by unsecured ones like bank cards.
When you’ve obtained the necessities lined, you may have a look at any non-essential prices that you could trim. “Prioritize housing, utilities, meals and transportation. If cash is tight, strive your greatest to maintain secured money owed present, as it’s simpler to barter with unsecured ones,” suggests Mike Bergeron, Credit score Counselling Supervisor at Credit score Canada.
It could be tempting to depend on payday loans or high-interest credit score, however these can lure you in a cycle of debt. Safer alternate options may embrace taking an installment mortgage from a financial institution or credit score union, speaking to a non-profit credit score counsellor about debt consolidation, or exploring hardship choices along with your lenders. Whereas not all money owed carry the identical threat, remember that lacking funds can result in added charges, harm to your credit score rating or collections.
Learn extra: The way to consolidate your debt
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Talking to collectors: When to succeed in out and what to say
If you happen to’re struggling to make funds, contact your collectors as quickly as potential. It could really feel uncomfortable, however reaching out early can open the door to choices that assist decrease your funds and defend your credit score. Many lenders provide hardship packages like lowered curiosity, decrease minimums, or fee deferrals—however they received’t provide them except you ask.
“Probably the most frequent errors I see folks make is avoiding their collectors once they lose their job,” says Bergeron. “The sooner you talk your state of affairs, the extra choices you’ll have. Most collectors would somewhat work with you than ship your account to collections.”
Whenever you get in contact, be direct and trustworthy. You might say, “I’ve had a lack of earnings and wish to hold my account in good standing. What hardship choices can be found?” Earlier than agreeing to something, ask: “Are you able to affirm how this may have an effect on curiosity, charges, and my credit score report?” If you happen to’re supplied a deferral or fee plan, make clear how lengthy it lasts, whether or not curiosity continues, and when common funds resume. At all times get the total settlement in writing. This helps keep away from surprises and provides you one thing to refer again to later.
In case your account has already gone to collections, know your rights. Collectors should comply with provincial legal guidelines and can’t harass or threaten you. You possibly can ask them for particulars concerning the debt and any fee choices, identical to you’d with a creditor. Keep calm, ask for all the things in writing, and don’t really feel pressured to conform to something on the spot. Seek the advice of a credit score counsellor should you need assistance coping with collections.
Out there assist: Accessing authorities and non-profit sources
If you happen to’re between jobs, there are packages throughout Canada that may assist. Begin by making use of for EI as quickly as you cease working, even should you haven’t acquired your Report of Employment but (processing can take a couple of weeks). “Guarantee that you’ve sufficient earnings coming in to assist your bills round the home, hold a roof over your head, and hold meals on the desk,” says Randolph Taylor, a licensed Credit score Counsellor with Credit score Canada. Every province additionally gives its personal emergency or earnings help packages that will assist with pressing wants like lease, utilities, or primary dwelling prices, relying in your state of affairs.
You may additionally be eligible for utility reduction packages, supplied by many hydro and gasoline suppliers throughout the nation, which may embrace invoice deferrals, fee plans, or seasonal reductions. For assist with day-to-day necessities, meals banks, and neighborhood organizations can present groceries and provides with no price or judgment. These sources are designed to assist Canadians by way of momentary hardships like job loss.
If you happen to’re struggling to handle debt whereas unemployed, take into account reaching out to a non-profit credit score counselling company like Credit score Canada without spending a dime one-on-one monetary teaching and assessment your earnings, bills, and money owed to assist construct a sensible plan to your state of affairs. Credit score counsellors can stroll you thru choices like debt consolidation, contact collectors in your behalf, and supply academic and budgeting sources.
Prioritizing funds: Which money owed to deal with first
When cash is tight, it’s vital to deal with the money owed that carry essentially the most threat. Begin with secured money owed, like your mortgage, lease, or automotive mortgage. Since secured money owed are tied to an asset, lacking these may result in eviction, foreclosures, or shedding your automobile. If you happen to’re falling behind, contact your landlord or lender early to ask about deferrals, lease reduction packages, or adjusting your reimbursement plan.
