Due to the COVID-19 pandemic, many people are facing unemployment or loss of income due to challenging business situations. It’s understandable that many people in Ontario are now worried about how to make their debt payments.
Now would be a good time to talk to a credit counselor, after all an initial consultation is free. You only pay service fees if you hire them to initiate a debt management or debt settlement plan for you.
Your credit counselor will take a look at your financial situation and help you decide what debt relief solution is best for you. A popular option for debt relief in Ontario is debt consolidation.
Another concern, however, is whether or not you can still get debt consolidation while under government assistance. After all, debt doesn’t disappear just because your earning capacity is diminished. Should and can you get approved for debt consolidation in Ontario on government benefits like CERB or ODSP?
What is CERB?
CERB stands for “Canada Emergency Response Benefit” it is a form of financial support that is being given to Canadians in emergency situations. In this case it’s given to those who are affected by the COVID-19 pandemic. In Ontario and elsewhere in Canada, CERB is available to both the employed and self-employed.
CERB during the time of COVID-19
CERB provides $500 a week that can help you financially. Due to the COVID-19 pandemic, CERB has now been extended from a maximum of 24 week for qualified applicants. The general eligibility criteria in Ontario for CERB right now is one of the following conditions:
- They have stopped working because of COVID-19
- They are eligible for Employment Insurance (regular or sickness benefits)
- They exhausted their Employment Insurance benefits (regular or fishing) during the period of December 29, 2019 to October 3, 2020
There are more qualifications here. After confirming you are qualified for CERB, you will also be able to apply for it on that page. CERB is available from March 15 to October 3, 2020.
Debt Consolidation and CERB
Debt consolidation allows you to consolidate multiple forms of debt and pay them off with only one monthly payment. If you go for a debt consolidation loan, you pay your debts by paying the loan. If you decide to use a credit counseling agency, you pay them to pay your creditors.
Even if you are on CERB, you should be able to apply for debt consolidation. The fact that you are unemployed or on CERB won’t show up on your credit record and it won’t impact your credit score.
As long as you have a good credit score, you should be eligible for a debt consolidation loan and can enroll in either debt management or settlement.
Keep in mind, however, that debt consolidation isn’t debt forgiveness, you’re still going to need to make monthly repayments. However, these payments – on your debt consolidation loans or to your credit counseling agency – will be lower due to lower interest rates and waivers of late fees. Keep in mind, however, that there will be service fees with your agency.
All in all, with careful budgeting, you can get debt consolidation in Ontario in CERB.
What is ODSP?
ODSP is the Ontario Disability Support Program, a social assistance program that provides both income and employment support to Ontario residents with disabilities.
ODSP Income Support
This program aims to offer financial aid to pay for a person with disability’s living expenses. It also provides health benefits such as drug and dental coverage. You can calculate how much you are eligible for here.
ODSP Employment Support
This program aims to help people with disabilities in Ontario find and keep a job. This is mostly in the form of training and mentoring. Though, if you want to start a business, they also offer financial help.
To apply for these programs, you must have a substantial physical or mental impairment that is continuous or recurrent. This should reduce or restrict your ability to work, take care of yourself, and take part in community life.
Debt Consolidation and ODSP
It is possible to get a loan while in ODSP, the money that you are receiving as part of this program will be treated as income by the lender. So ODSP will actually contribute to your “financial health” along with any other form of income and your credit score.
Being on ODSP should not hamper you for getting a debt consolidation loan or enrolling on debt management or debt settlement programs. Whatever you get can be used to pay your consolidated debts.