Credit Counselling New Brunswick

If you’re struggling with debt in New Brunswick, credit counselling could be the solution to help you regain control of your finances. This service offers expert guidance to help you create a realistic plan for repaying your debts, manage your money better, and avoid future financial pitfalls.

With the support of certified counsellors, you can work toward becoming debt-free without feeling like you’re facing your financial struggles alone. In this article, we’ll explore how credit counselling in New Brunswick works, the benefits of this particular option, and alternative options to consider.

What is credit counselling?

Credit counselling is a financial service that helps you manage your money, reduce debt, and work toward long-term financial stability. If you’re struggling to keep up with bills, falling behind on credit card payments, or feeling overwhelmed by your financial situation, credit counselling can provide clarity and support.

In New Brunswick, credit counselling agencies offer guidance on budgeting, spending habits, and debt repayment strategies. You’ll work with a certified credit counsellor who will assess your situation and help create a personalized plan to get you back on track.

One key benefit of credit counselling is that it often includes access to a debt management program, where your unsecured debts can be consolidated into one affordable monthly payment. Counsellors may also negotiate with creditors to reduce or eliminate interest charges.

How does credit counselling work?

Credit counselling works by providing guidance, structure, and support to help you tackle your debt and improve your financial health. It’s a step-by-step process that starts with understanding your unique situation and ends with a realistic plan for becoming debt-free.

Get a free consultation with a credit counsellor

The first step in credit counselling is to schedule a free consultation with a certified credit counsellor. 

As part of their credit counselling services, the counsellor will review your financial situation, including your income, expenses, and debts. This initial consultation is confidential and designed to help you better understand the options available to manage your debts.

Get professional advice on dealing with your debt problems

Once the counsellor has assessed your financial situation, they will offer personalized advice on how to deal with your debt issues. 

This could include strategies for budgeting, prioritizing debt payments, and exploring options such as debt management plans. The goal is to help you regain control of your finances and reduce some of the stress related to dealing with unpaid debts.

Find a plan to repay your debts affordably

Based on your financial situation, the credit counsellor will recommend a plan that works best for you. This might involve creating a budget, consolidating debts, or negotiating with creditors to lower interest rates or freeze late fees. 

The counsellor will guide you in selecting the most affordable repayment plan, ensuring that you can meet your financial obligations while maintaining a sustainable lifestyle.

What kind of debts can credit counselling help me with?

Credit counselling services are designed to assist with a variety of debts. Some of the common types of debts that credit counselling can help manage or reduce include:

Payday loans: High-interest payday loans can quickly spiral out of control. Credit counselling helps develop a strategy to consolidate these loans and manage repayments.

Credit card debt: Credit counsellors can work with you to consolidate credit card debt, reduce interest rates, and create a more manageable repayment plan.

Unsecured personal loans: Credit counselling can help you find ways to manage and reduce unsecured loans, making monthly payments more affordable.

Secured debts: While credit counselling primarily focuses on unsecured debts, counsellors can also guide you in negotiating with creditors to make secured debts, like mortgages or car loans, more manageable.

Will credit counselling impact my credit?

Credit counselling can have a temporary impact on your credit, but it can ultimately help improve your financial standing in the long run. The most noticeable impact is on your credit report (often called credit history), especially if you enter into a formal debt solution.

While a debt solution like a consumer proposal might be noted on your report, it typically won’t show as negatively as other forms of debt relief, like bankruptcy. It demonstrates your commitment to paying off your debts responsibly.

In the short term, your credit score may decrease slightly, especially if you’re consolidating credit card debt or other unsecured debts. You can’t erase information from your credit file, but if you stick to the agreed payment plan and reduce outstanding debts, your credit score will likely improve over time. This is because your credit report will reflect lower balances, improved debt-to-income ratios, and fewer missed payments.

Once you complete the credit counselling program, you’ll likely find it easier to qualify for credit products in the future, with better terms and interest rates, as your financial problems ease.

How to find a reputable non-profit credit counsellor

Finding a reputable credit counsellor is crucial to ensure you receive ethical and effective advice for your financial situation. Look for credit counselling agencies that are accredited by recognized organizations, such as the Credit Counselling Society.

Most reliable companies offer free consultations and are known for their transparency and commitment to helping people regain control of their finances, whether that’s unpaid debts or spiralling costs.

When choosing a credit counsellor, ensure they are certified professionals with extensive experience in managing debt.

Make sure you check reviews and testimonials to confirm the agency’s reputation, and always check that the services are provided free of charge or for a low fee, consistent with their non-profit status.

Alternative debt solutions to credit counselling

If credit counselling doesn’t seem like the right option for you, there are several other debt solutions in Canada that might better suit your financial situation:

Consumer proposal

A consumer proposal is a formal agreement with your creditors to pay back a portion of your debts over a period of time, usually up to five years. This option is ideal if you’re struggling to make regular payments on your debts and need a more manageable solution.

A consumer proposal can stop late fees and interest from accruing, offering relief from mounting debt and legal actions. It’s a good option if you want to avoid bankruptcy while still reducing the total debt you owe.

Debt consolidation

Debt consolidation involves combining multiple debts into one loan or payment plan, typically at a lower interest rate. This can make managing your debt easier as you only have to make one payment each month.

You may need to borrow money through a consolidation loan, and your goal should be to pay off your existing debts while maintaining good standing with creditors. This option works well if you’re eligible for a loan with favorable terms and want to streamline your finances.

Bankruptcy

If your debts are overwhelming and you’re unable to repay them, bankruptcy may be the last resort. Filing for bankruptcy eliminates most of the money you owe, giving you a fresh start. However, this comes with long-term consequences, including a significant impact on your credit score.

It’s important to consult a financial professional to determine if bankruptcy is the right path for your situation.

Talk to a Licensed Insolvency Trustee about credit counselling

Credit counselling can be an effective solution if you’re struggling with unmanageable debt and looking for a structured way to regain control of your finances. 

If you owe money on multiple high-interest loans, credit cards, or payday loans, credit counselling may be a helpful first step. A certified credit counsellor will work with you to assess your financial situation and determine the best course of action to suit your best interests, but it’s important to get advice first.

A Farber LIT can offer you guidance on dealing with defaulted payments, higher interest rates, or entering into a formal arrangement. For advice on how to solve your debt problems, contact us via our website to arrange an appointment today.