For many Canadians, credit cards and lines of credit are an everyday tool to cover expenses. But in 2025, with interest rates climbing higher than in recent years, paying down these debts has become much more difficult. What once seemed like a manageable balance can quickly spiral into something overwhelming.

The Impact of Rising Interest Rates

When interest rates increase, the cost of carrying debt rises too. This means:

• Credit card balances grow faster: Even if you’re making minimum payments, interest charges can outweigh your progress.
• Lines of credit become more expensive: Variable interest rates increase your monthly payments without warning.
• Budgets get tighter: More of your money goes toward interest, leaving less for essentials like food, rent, or transportation.

What used to be a short-term financial tool is now a major source of stress for households across Canada.

Why Paying Off Debt Is Harder in 2025

With today’s high rates, a balance that may have taken a few years to pay off can now take decades. For example:

A $10,000 credit card balance at 20% interest, with only minimum payments, can take over 20 years to repay.

Much of that time, you’re paying interest, not reducing the principal balance.

This is why so many people feel stuck: they pay and pay, but their debt doesn’t seem to shrink.

How a Consumer Proposal Can Help

The good news is you do have options. A Consumer Proposal, filed through a Licensed Insolvency Trustee, can provide immediate relief:

• Stops all interest charges on unsecured debts like credit cards, payday loans, and lines of credit.
• Consolidates your debts into one affordable monthly payment.
• Reduces the total amount you owe—creditors agree to accept a portion of the debt as payment in full once the proposal is complete.
• Protects your income and assets, giving you peace of mind while you rebuild financially.

Unlike bankruptcy, a Consumer Proposal allows you to keep your property while still getting significant debt relief.

Regain Control of Your Finances

Rising interest rates may make it harder than ever to pay down debt, but you don’t have to struggle alone. With the right plan, you can stop interest, reduce your payments, and finally see real progress.

At MORATAYA Corp, our Licensed Insolvency Trustees will review your situation, explain your options, and help you decide whether a Consumer Proposal is right for you.

📞 Call us today at (416) 784-0904 for a free consultation.