Thanks to its picture-perfect location, nestled between the Rocky Mountains and the Pacific Ocean, Vancouver is a beautiful place to call home. It’s also a costly place to call home. Vancouver ranks second to Toronto as the most expensive Canadian city to live in. As a result, there are many people in Vancouver struggling to make ends meet.
If you’re overwhelmed by debt and barely managing to meet your financial obligations, you might benefit from credit counselling in Vancouver. A Licensed Insolvency Trustee can provide guidance on everything from managing your debt to developing a budget and exploring your available debt relief options.
What is Canadian Credit Counselling?
Credit counselling is a service provided by a Licensed Insolvency Trustee (LIT) to help individuals manage their debt, improve their financial literacy, or recommend a more structured debt solution such as a Consumer Proposal or Bankruptcy.
In a counselling session, your LIT will assess your financial situation to understand the factors contributing to your current debt issues. Then, the goal is to provide you with targeted tools and education to get you out of debt and help you stay out of debt in the future.
For instance, if you’re struggling to manage your monthly debts, your LIT might teach you how to create a budget, and how to use it. If you have issues with credit, they can coach you on appropriate credit use. Your LIT will tailor your debt counselling sessions to target whatever debt issues you are dealing with.
In credit counselling, your LIT can help you with:
- Money management
- Proper credit use
- Financial literacy
- Financial goal setting
What to look for when choosing a consumer credit counselling service?
When selecting a credit counsellor, ask questions about the counsellors education and qualifications. While an individual can legally call themself a credit counsellor, this does not guarantee they have the necessary training to provide this service.
Be especially wary of credit counselors who make claims that seem too good to be true. For instance, if they promise to eliminate your debt or boost your credit score in a short period of time. Pulling yourself out of debt takes time and effort, it doesn’t happen overnight.
When you work with a Licensed Insolvency Trustee, you can feel confident that you are receiving help from a qualified professional. They are federally regulated by the Office of the Superintendent of Bankruptcy and have the education and specialized training to assist you with your debt-related problems. LITs are also the only professionals in Canada who are able to administer all types of debt help, including Consumer Proposals and Bankruptcies.
What is a Debt Management Plan?
Some credit counsellors offer debt management plans. A debt management plan is an informal proposal that your counsellor presents to your creditors on your behalf. You can think of a debt management plan as a form of debt consolidation.
The purpose is to consolidate your debts into one monthly payment. Your counsellor might also try to eliminate your interest payments or extend the time you have to repay your debt. In most cases, you have to repay the total amount of debt you owe.
A debt management plan is completely voluntary. Your creditors are not required to work with the credit counselor and do not have to accept the proposal.
Before enrolling in a debt management plan, make sure you understand all of the fees involved and consider if it is financially worth it for you to move forward. Know that a credit counsellor should never ask you to pay upfront fees before providing a service as this is illegal. However, even if your creditors refuse to negotiate with the counselling agency, you still might need to pay fees.
Will credit counselling affect my credit score?
Simply speaking to a credit counsellor will not impact your credit score. However, enrolling in a debt management plan will affect your score. Even though you still have to pay back all of your debt, the debt management plan will still show up on your credit report for up to six years.
Alternatives to Credit Counselling
If you’re questioning if credit counselling in Vancouver is right for you, speak to an LIT. They can explain all of the debt solutions available and recommend one that best suits your situation. If you are completely overwhelmed by your debt and unable to pay your bills, an LIT can recommend and administer a more formal debt relief option, such as a Consumer Proposal or Bankruptcy.
A Consumer Proposal is a formal debt solution where you and your LIT create a proposal to pay off a portion of your debts, extend the time you have to pay, or both. A Consumer Proposal can be used as an alternative to a debt management plan or other forms of debt consolidation. Other than Bankruptcy, a Consumer Proposal is the only other method in Canada that can effectively reduce your debt and is becoming a top choice for Canadians.
Personal Bankruptcy is a debt solution reserved for those who can not afford to pay their bills. It is a federally regulated process that can discharge you from many of your unsecured debts. Only a Licensed Insolvency Trustee can administer a personal Bankruptcy proceeding. While filing for Bankruptcy is typically a last choice, it is designed to provide honest Canadians with a fresh financial start.
Contact an LIT for Financial Assistance in Vancouver
If you find yourself burdened with debt and need financial assistance in Vancouver, reach out to our team of debt experts at Allan Marshall & Associates. Whether you’re interested in credit counselling, debt consolidation, or a Consumer Proposal, our Licensed Insolvency Trustees can provide the entire range of debt relief options. To set up a free, no-obligation call, contact us at 1-888-371-8900, or fill out our online contact form.