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How Does Credit Counselling Work?

by:
Sandra Sherk

If you’re like many Canadians struggling with debt, you may be looking for a way out (and a way to stop those pesky collection calls). However, you may not know what options are available to you—or which options are the best for your personal situation. Here are two common questions we receive from many first-time callers.

What is Credit Counselling?

Credit counselling is a service that offers you solutions for getting out of debt, and even more importantly, staying out of debt in the future. You should look for a credit counselling agency that is a registered non-profit charity and an accredited member of a national organization, such as Credit Counselling Canada.  Also, be sure the counsellors are certified and professionally trained.

How Does Credit Counselling Work?

If you choose to work with Credit Canada, a certified counsellor will offer you expert advice and financial options tailored to your specific needs. Our services are strictly confidential—we cannot and will not contact anyone without your prior written consent. It is also a completely voluntary program. It is up to you to decide the best option for dealing with your financial challenges.

Your First Appointment

Your first appointment will consist of a full Debt Assessment. You and your counsellor will look at your income, expenses, assets, and debts to determine your current financial status. They will stress the importance of looking at both your regular and irregular expenses to help you better understand how to manage life's surprises and expenses. This assessment is very detailed because it's important to know where you stand to determine how best you can move forward. This can be overwhelming to attempt on your own, but with a certified counsellor guiding you through this process it becomes much more manageable.

Mapping Out a Plan

Your counsellor will then review possible debt solutions with you, and help you map out the best path forward. Solutions may include a Debt Consolidation Program (DCP) with our agency or a debt consolidation loan with your own bank or credit union. If you need a workable budget that allows you to meet all of your commitments, a home equity loan might also be a viable option. Finally, some people may need to look at insolvency, which can mean a consumer proposal or as a last resort, bankruptcy. Your counsellor will explain the various options, what's involved in each, and how they may or may not be the right fit for you. Your counsellor will also discuss the impact of each option on your credit rating—as well as the impact of doing nothing about your debt. If the best solution isn’t offered by our agency, we can provide you with referrals that will help you find the right solution.

Choosing a Debt Consolidation Program

If you decide to go on a Debt Consolidation Program with Credit Canada, the program will be laid out for you so that you have a complete understanding of the process. Your counsellor will explain how Credit Canada acts as a middleman between you and your creditors, negotiating with them to get interest rates reduced or even waived. Your payment plan will also be discussed, including the fact that your monthly payment will be put into a trust account and then disbursed to your creditors on a monthly basis. Your counsellor will also explain how you can qualify for an unsecured credit card once you've successfully completed the program. 

Learning Money Management

If you choose a DCP as the best option for you or as a stand-alone service, you will also recieve Money Management and Budgeting assistance. Your counsellor will help you create a realistic workable budget, review factors that may be holding you back, and discuss ways to help you achieve your life goals. While typical DCP programs only last about 36 months, these money management skills will last you a lifetime!

Ready to Change Your Future?

Credit Canada is here to help you with your financial concerns and problems. Give us a call and schedule your free counselling session. This step alone could eliminate stress and be the beginning to a debt-free life without sleepless nights, family arguments, and collection calls. You have nothing to lose—only a lot to gain!

Free Debt Assesment

Topics: Credit Counselling, Money Management, Budgeting, Financial Management, Debt Consolidation, Debt Management, Credit Card Debt, financial stress, debt collectors, debt repayment strategies

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