In July 2025, Canada’s unemployment rate hovered around 6.9%, and the youth unemployment rate reached 14.6%. According to the MNP, they worry that someone in their family might lose their jobs, the highest unemployment anxiety ever. Meanwhile, 42% of Canadians say money is the biggest source of stress this year, and nearly half lose sleep due to it.
If you are between jobs and are worried about how to pay your bills, protect your credit or figure out what helps, then you are here. In this article, we will cover how to prioritize payments, negotiate with creditors, and access to unemployment benefits programs so that things can be kept manageable when searching for the next opportunity.
The initial 48 hours: Classify your finances
You can feel overwhelmed the first few days after losing your job, but taking some simple steps can help you restore your sense of control.
Start by adjusting your current budget or developing a quasi-budget that covers only essentials: housing, utilities, groceries, telephone, internet, shipping and minimum debt payments. Consider any income you expect to earn during this period, such as severance payments, emergency savings, or employment insurance (EI). This gives you a clear understanding of your needs and where you might need to cut.
Then, you need to prioritize your spending. Include your top priorities, which include rent or mortgage and utilities, and then increase basic food costs and health needs. Next comes mortgage debt (loans related to assets, such as vehicles), and then unsecured debt like credit cards.
Once the essentials are covered, you can view any unnecessary expenses that can be trimmed. “Prefer priority for housing, utilities, food and transportation. If money is tight, try to keep secured debt up to date, as it is easier to have an unsecured debt,” said Mike Bergeron, Credit Consulting Manager, Canada.
It can be easy to rely on payday loans or high interest credit, but these can put you in debt cycles. Safer alternatives may include getting an installment loan from a bank or credit union, talking to a nonprofit credit adviser about debt consolidation, or exploring hard options with lenders. While not all debts have the same risks, be aware that a lost payment can cause you to increase fees, lose your credit score or receive payments.
Read more: How to consolidate your debt
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Talk to creditors: When to lend a helping hand and what to say
If you are working hard to pay, please contact your creditor as soon as possible. This may feel uncomfortable, but reaching out early can open the door to options that help lower payments and protect credit. Many lenders offer tough plans such as reducing interest, minimum minimum or payment extensions, but they won’t offer them unless you ask.
“One of the most common mistakes I see people make is to avoid creditors losing their jobs,” Bergeron said. “The sooner you communicate the situation, the more options you will have. Most creditors would rather work with you than send your account to favorites.”
Please be straight and honest when you get in touch. You can say, “I lost income and wanted to keep my account in good credibility. What are the difficult options?” Before agreeing to anything, ask, “Can you confirm how this will affect interest, fees and my credit report?” If you provide a deferral or payment plan, please clarify how long it lasts, whether interest will continue and when recurring payments will resume. Always reach a complete agreement in writing. This helps avoid surprises and is for you to refer to later.
If your account has been transferred to the collection, please understand your rights. Collectors must abide by provincial laws and cannot harass or threaten you. You can ask them to provide detailed information about the debt and any payment method, just like you do in your creditors. Stay calm, ask for everything in writing, don’t feel stressed, agree to anything on the spot. If you need help with handling collections, please consult a credit consultant.
Available support: Access to government and nonprofit resources
If you are between work, there are programs across Canada that can help. First, even if you haven’t received a work history (processing may take several weeks), apply for EI now. “Make sure you have enough income to cover the expenses around the home, put the roof on your head, and put the food on the table.” Each province also offers its own emergency or income assistance programs that may aid urgent needs such as rent, utilities, or basic living expenses, depending on your situation.
You may also qualify for utility relief programs offered by many hydro and gas providers nationwide, including bill extensions, payment plans or seasonal discounts. To get help from food banks and community organizations, groceries and supplies can be provided without judgment. These resources are designed to support Canadians through temporary hardships.
If you work hard to manage your debt when you are out of work, consider getting one-to-one financial guidance with a nonprofit credit consultant like Credit Chard Charter for free and reviewing your income, expenses, and debt to help you develop a realistic plan for your situation. Credit advisors can guide you through debt consolidation, contact creditors on your behalf, and provide educational and budgetary resources.
Priority payment: What debts are processed first
When money is tight, it is important to focus on debts with the greatest risk. Start with mortgaged debts such as mortgages, rents or car loans. Because secured debts are related to assets, the lack of these debts can lead to evictions, foreclosures, or loss of your vehicle. If you are behind, contact your landlord or lender as early as possible to ask questions about extensions, lease relief plans or adjustments to repayment plans.
