What is Credit Counselling in Alberta?

What is credit counselling in Alberta?

Credit counselling in Alberta is a professional service provided by certified counsellors at non-profit agencies that help you manage your debt. The service covers budgeting guidance, debt education, and formal repayment options for unsecured debts like credit cards, personal loans, and lines of credit.

The Financial Consumer Agency of Canada (FCAC) recommends credit counselling as a starting point for anyone who is having trouble keeping up with payments.

Source: Financial Consumer Agency of Canada – Getting help from a credit counsellor

Non-profit credit counselling agencies in Alberta are accredited through Credit Counselling Canada (CCC) or the Canadian Association for Financial Empowerment (CAFE). CAFE administers the Accredited Financial Counsellor Canada (AFCC) and Certified Financial Counsellor (CFC) designations.

A credit counsellor goes through your income, expenses, and debts, then walks you through your options. Those range from simple budgeting changes to a formal Debt Management Plan or a referral to a Licensed Insolvency Trustee.

How does the credit counselling process work in Alberta?

Credit counselling in Alberta follows four steps. From your first call to setting up a plan, the process usually takes one to two weeks. The initial consultation itself runs about 60 to 90 minutes.

The four steps

1. Book a free consultation. Reach out to a non-profit credit counselling agency accredited by Credit Counselling Canada or CAFE. The first session is free, confidential, and has no effect on your credit score.
2. Complete a financial assessment. The counsellor looks at your income, monthly expenses, and all outstanding debts. A soft credit pull is sometimes requested at this stage. It does not affect your score, and there is no obligation to proceed.
3. Review your options. If your debts are manageable with interest relief, the counsellor recommends a Debt Management Plan (DMP). If your debts are too large or your income too low for a DMP, the counsellor refers you to a Licensed Insolvency Trustee to discuss a consumer proposal or bankruptcy.
4. Enroll in a plan or follow through on the referral. If a DMP fits your situation, you sign an agreement with the agency. The agency contacts your creditors, negotiates interest relief, and sets up your monthly payment. If the counsellor refers you to a trustee, that is your next step.

Source: Financial Consumer Agency of Canada – Getting help from a credit counsellor

Both non-profit and for-profit organizations offer credit counselling in Alberta. Always verify accreditation before enrolling.

What does a Debt Management Plan through credit counselling include?

A Debt Management Plan (DMP) is the main repayment program offered through credit counselling in Alberta. It is an informal arrangement your credit counsellor sets up with your creditors on your behalf.

The agency negotiates with each creditor to reduce or eliminate interest on your unsecured debts. You make one monthly payment to the agency, and the agency distributes the funds to your creditors. The maximum repayment period is 60 months, and you repay 100% of what you owe.

Not every creditor has to agree. If a creditor declines the DMP, the counsellor will suggest you arrange payments directly with that creditor.

A DMP is not legally binding. Creditors can still use collection agencies during the plan. That is the main difference between a DMP and a consumer proposal. A consumer proposal binds all creditors once a majority accepts it. A DMP is voluntary on both sides.

Source: Financial Consumer Agency of Canada – Getting help from a credit counsellor

How much does credit counselling cost in Alberta?

Credit counselling in Alberta starts with a free consultation. Non-profit agencies do not charge for the first session, and many provide ongoing budgeting and financial education at no cost.

If you enrol in a Debt Management Plan, fees apply. As of 2026, non-profit agencies typically charge an administration fee based on a percentage of your monthly DMP payment, plus a possible setup fee. These fees vary by agency, so get a full breakdown before you commit.

The FCAC recommends comparing the agency’s fees against the interest you save under the DMP. If the fees outweigh the interest savings, a DMP is not the right option for you.

Source: Financial Consumer Agency of Canada – Getting help from a credit counsellor

For-profit credit counselling firms operate under different fee structures and are not held to the same accreditation standards. Ask about all costs upfront, and stick with a non-profit agency accredited by Credit Counselling Canada or CAFE.

How does credit counselling affect your credit score in Alberta?

Credit counselling in Alberta affects your credit differently depending on what you do. A conversation with a counsellor has no impact on your credit score.

Enrolling in a Debt Management Plan

If you enrol in a DMP, each account included in the plan receives a “7” payment rating on your credit report. It means you are making agreed-upon payments through a debt relief program. On revolving credit accounts, such as credit cards, this appears as R7.

Equifax Canada’s rating system also defines I (instalment), O (open), C (line of credit), and M (mortgage) as separate account types that use the same 0 to 9 scale. In theory, an instalment loan included in a DMP would carry an I7 rating. In practice, almost every source refers only to R7, likely because credit cards and other revolving accounts make up the bulk of unsecured debt in these programs.

Equifax’s credit report system also flags these arrangements with specific codes in the public records section of your report. CDC (consumer debt counselling) identifies a DMP, while PR/BK (proposal under bankruptcy) identifies a consumer proposal, and CRCLD (court consolidation) identifies a court-ordered debt consolidation.

Source: Equifax Canada – Consumer Credit Report User Guide, 2017

The R7 notation stays on your report for two years after you complete the plan, or six years from the date of default on the original debt, whichever comes first.

How does that compare to other debt relief options?

A consumer proposal also results in an R7 credit rating on each revolving account included in the agreement. The same “7” code applies across account types, but R7 is the rating you will see referenced most often. A consumer proposal remains on your credit report for three years after completion or six years from filing, whichever is sooner.

Bankruptcy results in an R9 rating, the most severe, and stays on your report for six to seven years after discharge.

The credit impact of a DMP and a consumer proposal is similar at the account level, but a consumer proposal costs less each month because you repay only a portion of the total debt.

How do you find a legitimate credit counsellor in Alberta?

Credit counselling is not a regulated title in Alberta. Anyone can call themselves a credit counsellor, so you need to verify credentials yourself.

What to verify

Look for membership in Credit Counselling Canada (CCC), which requires agencies to be non-profit, maintain accreditation standards, and ensure all counsellors hold a professional designation. CCC does not allow counsellors to be paid on commission, which keeps advice objective.

The Canadian Association for Financial Empowerment (CAFE) administers the CFC and AFCC designations and sets agency accreditation standards through the Canadian Centre for Accreditation.

Red flags

Be wary of any agency that charges upfront fees before providing services, guarantees specific outcomes, or pressures you to sign immediately. The FCAC warns that some for-profit companies mislead consumers by offering to help pay off debt or repair credit.

If something feels off, walk away. There are legitimate non-profit agencies across Alberta.

Source: Financial Consumer Agency of Canada – Getting help from a credit counsellor

What is the difference between credit counselling and a consumer proposal in Alberta?

Credit counselling and a consumer proposal both deal with unsecured debt in Alberta, but they work differently and suit different situations.

A DMP through credit counselling requires you to repay 100% of the principal, with interest reduced or eliminated. It is voluntary for creditors. They can decline to participate or pull out at any time. The plan is administered by a non-profit credit counselling agency and is not filed with any court.

A consumer proposal reduces the total amount you owe. It is a legal process under Part III, Division II of the Bankruptcy and Insolvency Act (BIA) and is administered by a Licensed Insolvency Trustee.

Once a majority of creditors accept a consumer proposal, it is binding on all unsecured creditors. A consumer proposal covers unsecured debts under $250,000, excluding the mortgage on your principal residence.

Source: Bankruptcy and Insolvency Act, Part III Division II

Both result in an R7 credit notation. The practical difference is what you pay back. A DMP requires full repayment. A consumer proposal typically settles for less.

DMP vs consumer proposal vs bankruptcy

	Debt Management Plan	Consumer proposal	Bankruptcy
Amount repaid	100% of principal	Portion of total debt	Portion of debt (via surplus income)
Interest	Reduced or eliminated	Stopped completely	Stopped completely
Creditor agreement	Voluntary	Legally binding once majority accepts	Legally binding
Administered by	Non-profit credit counselling agency	Licensed Insolvency Trustee	Licensed Insolvency Trustee
Legal protection from creditors	None	Full stay of proceedings	Full stay of proceedings
Tax debt included	No	Yes	Yes
Maximum term	60 months	60 months	9 or 21 months (first time)
Credit notation	R7 for 2 years after completion	R7 for 3 years after completion	R9 for 6 to 7 years after discharge

What types of debt can credit counselling in Alberta help with?

Credit counselling in Alberta and the DMP program cover most unsecured debts. That includes credit card balances, personal loans, unsecured lines of credit, overdue utility bills, and some collection accounts.

DMPs do not cover secured debts like mortgages or car loans. They also do not typically cover student loans, payday loans (most payday lenders refuse to participate in DMPs), or tax debts owed to the Canada Revenue Agency (CRA).

If CRA tax debt or student loans make up most of what you owe, a consumer proposal is more appropriate. A consumer proposal can include tax debts and, in most cases, student loans if you have been out of school for more than seven years.

When should you consider credit counselling instead of other debt relief options?

Credit counselling in Alberta and a DMP are the right fit when you can afford to repay 100% of the principal within five years, as long as your creditors agree to cut the interest. If your total unsecured debt is under $20,000 and you have steady income, a DMP is worth looking at.

If your unsecured debts are above $20,000 and full repayment within five years is not realistic even without interest, a consumer proposal or bankruptcy through a Licensed Insolvency Trustee makes more sense. The same is true if key creditors refuse to participate in a DMP, since the plan has no legal mechanism to compel them.

Here is a quick test. Strip the interest from your debts and divide the remaining balance by 60 months. If you can afford that monthly payment, credit counselling works. If you cannot, you need a different solution.

Why is demand for credit counselling rising in Alberta?

Credit counselling in Alberta is getting more attention as household debt across Canada continues to grow. As of Q3 2025, the household debt-to-income ratio reached 176.7%. That means Canadians owe $1.77 for every dollar of disposable income.

Source: Statistics Canada – National balance sheet and financial flow accounts, Q3 2025

Alberta had the third-highest volume of consumer insolvencies in Canada over the 12-month period ending October 2025, with 18,913 filings. That was down 1.4% from the same period a year earlier, but the numbers are still well above pre-pandemic levels.

Consumer proposals accounted for 86.4% of all consumer insolvencies in Alberta, compared to 78.6% nationally. That is the highest proposal rate among the major provinces.

Source: Office of the Superintendent of Bankruptcy Canada – Insolvency Statistics, October 2025

Energy sector volatility, rising living costs, and higher mortgage payments at renewal have all added pressure. Most people do not know about credit counselling until the math stops working.

Frequently asked questions

Will credit counselling affect my credit score?

Talking to a credit counsellor does not affect your credit score. If you enrol in a DMP, accounts included in the plan receive an R7 credit rating on your credit report.

This stays for two years after you complete the program. Your credit score drops during the DMP but recovers once the notation clears and you rebuild with responsible borrowing.

Is credit counselling in Alberta free?

Your first consultation with a non-profit credit counselling agency is free. If you enrol in a Debt Management Plan, the agency charges an administration fee based on a percentage of your monthly payment. A small setup fee may also be charged.

Fees vary by agency. Non-profit agencies affiliated with Credit Counselling Canada or CAFE must be transparent about all costs before you commit.

Can credit counselling stop collection calls in Alberta?

A credit counsellor can ask your creditors to stop collection calls, but they have no legal authority to force it. Creditors can still use collection agencies during a DMP.

If you need legal protection from creditor actions, a consumer proposal or bankruptcy through a Licensed Insolvency Trustee provides a stay of proceedings that stops all collection activity.

What is the difference between a Debt Management Plan and a consumer proposal?

A DMP requires you to repay 100% of the principal owed, with interest reduced or eliminated. It is voluntary for creditors.

A consumer proposal reduces the total amount you owe and is a legal process under the Bankruptcy and Insolvency Act. Once a majority of creditors accept it, the proposal is binding on everyone. Both result in an R7 credit notation, though the DMP clears two years after completion compared to three years for a consumer proposal.

How do I know if a credit counselling agency in Alberta is legitimate?

Check whether the agency is accredited by Credit Counselling Canada or the Canadian Association for Financial Empowerment (CAFE). Confirm it is a registered non-profit and verify its standing with the Better Business Bureau.

Ask whether counsellors hold the AFCC or CFC designation, and confirm that no counsellor is paid on commission. If an agency charges upfront fees, guarantees specific outcomes, or pressures you to sign immediately, find another one.

Does the Alberta government offer credit counselling?

The Alberta government does not directly provide credit counselling services. Service Alberta offers general consumer protection information, and the FCAC provides federal guidance on finding a reputable credit counsellor.

For direct credit counselling, contact a non-profit agency accredited by Credit Counselling Canada or CAFE.

Talk to a certified credit counsellor

If your debts are becoming harder to manage, a free consultation with a certified credit counsellor is a good starting point.

You can also book a free, confidential appointment with a Licensed Insolvency Trustee to find out whether credit counselling, a Debt Management Plan, a consumer proposal, or another option is the right fit for your situation.