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Credit Counselling

If you're struggling with debt, credit counselling agencies across Canada can help you better manage your money and meet your financial goals. Credit counsellors are trained to offer personal finance support that can ultimately help you avoid bankruptcy and repay what you owe with one affordable monthly payment. Your credit counsellor will find out more about your situation and offer advice to help make an informed decision about the best debt solution for your needs.

Why use credit counselling in Canada?

If you’re struggling with debt and regularly miss payments on credit cards, car loans or even your mortgage, credit counselling can help you regain control.

It’s important to find debt management support. If you ignore the issue you could be in danger of losing your home and other assets you’ve worked hard to pay for, as well as your ability to secure future loans, credit and more. You could even find yourself facing bankruptcy.

Credit counsellors can offer confidential advice to help you with your money management skills and support you to deal with all your debts.

How does credit counselling work?

Credit counselling can explain the different methods available to you to get out of debt, and also how to manage your current budget to help you prevent falling further into debt, both now and in the future.

1. Your financial assessment

The process of credit counselling involves examining your current financial situation. You’ll meet with an experienced credit counsellor who will analyze your current income and your outgoings to come up with a plan to help you become debt-free.

As well as your income and expenses, you’ll talk about your debts and your assets. You’ll also discuss your budget with your credit counsellor to allow them to get an idea of how far your money goes every month and how prepared you are for a financial emergency and irregular or unexpected payments.

Providing this financial information is important not only for the credit counsellor but for yourself too. It offers the chance to review any payment arrangements you have in place and the scale of your debt issues.

While it may be daunting to do so, seeing the full extent of your financial obligations can help you understand how to manage them more effectively and get out of debt faster.

2. Your debt solutions

As well as reviewing the debt you owe, your credit counsellor will also take the time to explain all the debt solutions available to you.

Your counsellor will help you create a long-term plan to manage your repayments comfortably, to get out of, and to stay out of debt.

Debt help options can include debt management plans such as a debt consolidation program, a consumer proposal or negotiating an alternative repayment plan.

If you decide to opt for a consumer proposal your credit counsellor will advise you to speak with a licensed insolvency trustee. The trustee will set up the consumer proposal on your behalf that will allow you to pay off debts through a trustee at a more manageable rate or free up some of the equity in your home to help contain your financial situation.

3. Money management

Credit counselling services also include advice about money management.

Many people have never learned how to manage a budget, to work out the true costs of credit cards and loans, how to build on their savings to provide a safety net and to save for the things they really want from life.

By being shown where your bad habits have landed you in trouble, you will learn not only what your spending triggers are, but also how to avoid them in your new routine. It could be as simple as avoiding the places where you overspend on luxuries, cutting back on expensive social and leisure pursuits, or finding cheaper alternatives that can provide just as much personal reward as the costlier options you thought you couldn’t live without.

Your credit counsellor will help you understand how to create a household budget for you and your family relating to your income, setting aside part of what you earn for both expected and unforeseen costs. You will learn how to create goals and more importantly, how to stick to them.

Having a credit counsellor at hand throughout the term of your counselling plan gives you continual access to the help you’ll need to not only avoid the pitfalls of debt but also understanding why each of the methods in your personal management system will work for you, and how you can continue to build on them well into the future.

Advantages of credit counselling

If you’re worried about debt, working with a reputable credit counselling agency can have many advantages.

Credit counselling allows an individual to see a clear and unbiased view of their financial situation. This should outline what they can and can’t afford to spend each month to stay in control, and if they do, what steps they can take to regain financial stability.

There is always a range of solutions and plans that we are unaware of. Using a qualified counsellor and a professional counselling service, all of the tips and relief options will be made clear and available to help you stay in control of your budget.

Disadvantages of credit counselling

Credit counselling doesn’t actually reduce the amount of debt you’re in, nor will it remove any of the total amounts that you need to pay back. Occasionally a debt counsellor can negotiate interest rates and payment terms that will make repayment more manageable, but generally, the amount you owe will still be your responsibility.

Another disadvantage is credit counselling will show up on your credit report with an R7 rating. This can have a negative impact when applying for future lines of credit.

Is credit counselling the correct option for you?

Credit counselling is an excellent way to rectify the smaller problems in your budgeting system before matters get out of hand, and can also provide valuable information about the mistakes you’ve made in the past and how to avoid them in future.

However, there is a selection of alternative solutions you can also consider.

A debt settlement can reduce your total debt amount by between 40 and 60% and could clear your debt problems in a much shorter term.

Debt consolidation can provide one single simple and more manageable payment to repay all of your existing debts.

A consumer proposal is an agreement between the debtor and their creditors to settle their unsecured debts. This will freeze any interest being added to the debts, protect your assets and last no longer than the maximum 5-year term.

You should discuss your personal situation with a qualified debt counsellor. They will guide you towards the best plan and appropriate options for your unique debts.

Looking forward to a debt-free existence

Working with a credit counsellor to get your finances in order and to clear yourself of all debt requires discipline and a strong belief that you can take back control of your situation, and work towards a happy financial future.

The rewards are great and keeping these goals in mind will be part of what keeps you moving forward, even when it might feel difficult to do so.

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How we can help you with your debt

You’re on your way to resolving your debt problems, this is what will happen next.

Fill out the form and arrange a call back with one of our debt advisors.

We will then run through all of the options available to you and advise you on which is the best option for you

We will then help you put the debt solution in place that will help you get back on track