Family Loans

Dear Jeff,

I lost my job last year and started relying on credit. Once my cards were maxed out, I turned to family members for loans. I have a new job so I want to sign up for a debt management program. But can I include loans from family members in the program?

Cara S.
Edmonton Alberta


Thanks for the question Cara!

We often talk to clients like you, who have found themselves borrowing from family or friends in order to get by once their credit line runs out and they can’t borrow anything else from banks.

Borrowing from friends and family can be tricky, especially when you don’t have the means to repay these loans. But in most cases there is really no benefit to including these loans in a debt management program (DMP).

When you work with Consolidated Credit and sign up for a DMP, our trained credit counsellors submit proposals to your creditors in an effort to lower your interest and repayment rates. Loans from family and friends don’t typically carry an interest rate. And if they are charging you interest, it’s probably not something they are willing to reduce. However, friends and family tend to be far more flexible in terms of payback plans.

If you are stressed or concerned about paying back these loans, I have some good news for you, Cara. By taking the positive step of targeting and eliminating debt to your creditors, you can begin to free up income in your budget to apply to other obligations, like loans from family and friends. Essentially, since a debt management program reduces your monthly payment obligation to your creditors, you’ll have more money available each month so you can start to pay back your friends and family.

Jeffrey Schwartz
Executive Director

Jeffrey Schwartz is the Executive Director of Consolidated Credit Counseling Services of Canada and President of the Credit Association of Greater Toronto (CAGT).

If you have a question about a debt management program or just about finance in general, Jeff is here to help. Send us an email with your question to You’ll get the expert advice you need and your question may be featured here on our website.

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