These days, the cost of living seems to be rising and rising. No matter how hard you try to save or budget your money, your debt may remain a prominent issue. It can cause a lot of stress and anxiety, but luckily, there are debt solutions in which you can rebuild your finances. You may consider credit counselling services if you’re looking for assistance. What exactly is credit counselling? We’ll explain everything you need to know regarding this service.
What Is Credit Counselling?
Credit counselling services is a broad term which describes the process of assisting Canadians with their financial problems, such as debt. A credit counsellor or debt consultant can provide advice and education on money management strategies, in addition to outlining tactics to deal with debt.
However, finding a proper credit counsellor can be a difficult task. Since there are no mandatory educational requirements to become a credit counsellor or debt consultant, finding a professional, certified counsellor can be tricky. As entering into any debt management plan can hurt your credit, it is important to seek advice from Canada’s only professional that is licensed to reduce or eliminate debt – a Licensed Insolvency Trustee.
Licensed Insolvency Trustees are federally licensed and regulated. They have the experience and education required by the government to file a consumer proposal or bankruptcy, and the ability to explain the impact of these options on your situation, whereas credit counselors or debt consultants may not.
When a Licensed Insolvency Trustee provides you with credit counselling services, you can be sure that you will understand all your financial options, and they will point you in the right direction. In many cases, there may be a better solution for you, such as a consumer proposal or bankruptcy.
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Is Credit Counselling My Only Option?
Credit counselling or a debt management plan may not be a wise option for you, but there are other services that can help:
- Consumer Proposal: With this option, your debts will be consolidated into affordable monthly payments. This will allow for more flexibility when it comes to settling on an amount to pay each month, as it’s designed to meet your unique needs. A consumer proposal can allow for the negotiation of a reduced total debt balance with your creditors, and making monthly payments on the remaining portion for up to five years. A consumer proposal has the added benefits of avoiding loss of secured assets, no stressful collection calls, and reduction of unsecured debts.
- Bankruptcy: While filing for bankruptcy can affect your credit history for 7-14 years, it can have benefits. Bankruptcy can provide faster debt relief, affordable payments, and relief from collection calls. A debt management plan from a credit counsellor can be a 5 year process, with no formal ‘stay of proceedings’ or legislative protection. Only unsecured debts, such as credit cards and payday loans are included in a debt management plan. However, bankruptcy provides options to discharge most of your debts, as well as the option to protect your valued assets. Most people consider “bankruptcy” a bad word, but there are perks to be had with this service. We are more than happy to discuss how a bankruptcy would impact you.