If you struggle with budgeting and managing your credit cards, consider credit counselling in Coquitlam-Port Moody. Through the credit counselling process, you can improve your financial knowledge and learn new skills that can help you get out of debt, and stay out of debt in the future.
What is Credit Counselling?
The purpose of credit counseling is to help you improve your financial situation. Whether you want to learn how to create a budget, manage your credit cards, or consolidate your debt, a Licensed Insolvency Trustee (LIT) can tailor your sessions to your specific needs.
An LIT will start by assessing your debt situation to determine if credit counselling is the right path forward or if another debt option, such as a Consumer Proposal or Bankruptcy, makes more sense.
How to Find Credit Counselling in Coquitlam/Port Moody
You can find a credit counsellor through not-for-profit and for-profit organizations. When selecting a credit counsellor, it’s important however to consider the following factors:
- Fees. Find out how much credit counselling will cost. Is there an initial set-up fee, administration fee, or membership fee? Is the first consultation free?
- Qualifications. Legally, credit counsellors aren’t required to have any specialized training. However, you want to find a counsellor with the qualifications and experience necessary to help you. Before working with a credit counsellor ask if they have any specialized training and how long they’ve offered credit counselling services.
- Services. Lastly, ask what services are available through the counselling company. Do they offer debt consolidation, educational seminars, or debt management plans?
Why Work With a Licensed Insolvency Trustee?
When you work with a Licensed Insolvency Trustee you can feel confident in their fees, qualifications, and the range of services they offer.
- Fees. When you work with an LIT, you never have to worry about being overcharged. All LIT fees are regulated by the Office of the Superintendent of Bankruptcy. Plus, your initial consultation with an LIT is always free.
- Qualifications. LIT education and qualifications are also federally regulated, so you can feel confident they have the specialized debt skills required to provide quality credit counselling.
- Services. LITs can provide the widest range of debt help and debt relief options. LITs are the only professionals in Canada authorized to administer formal debt relief options, including Consumer Proposals and Bankruptcy proceedings.
What is a Debt Management Plan?
Some credit counsellors offer debt management plans. A debt management plan (DMP) is a form of credit consolidation, where you can combine multiple credit card payments into one monthly payment.
In a DMP, your credit counsellor makes an informal proposal to your creditors on your behalf. In this proposal, your counsellor might request to reduce or cancel your interest payments or extend the time to repay your debt. In most cases, you will have to pay 100% of your debts.
A DMP is completely voluntary, which means your creditors do not have to accept the credit counsellors proposal. Unfortunately, if your creditors refuse to engage in the DMP, you may still have to pay your counsellor fees.
Will a debt management plan affect your credit?
Yes, if you decide to participate in a debt management plan, it will show up on your credit report and will negatively impact your credit score. A debt management plan will stay on your credit report for two years after you pay off your debts. You might find it difficult to gain approval for new credit until the DMP is removed.
Alternatives to Credit Counselling in Coquitlam-Port Moody
If you are dealing with a mountain of debt and can no longer afford your bills, you and your LIT may decide that a more formal debt solution is required, such as a Consumer Proposal or Bankruptcy.
A Consumer Proposal is a formal process where you work with an LIT to create an offer to pay your creditors a percentage of the debt you owe, extend the time you have to repay, or both. The maximum amount of time you have to repay a Consumer Proposal is five years.
As soon as your LIT files your proposal, you can stop making payments to your unsecured creditors, and any wage garnishment or creditor lawsuits filed against you will stop.
Personal Bankruptcy is another debt solution that can only be administered by an LIT. Like a Proposal, as soon as you file for Bankruptcy you can stop making payments directly to your unsecured creditors, and any wage garnishment or creditor lawsuits will cease.
Once you’re declared Bankruptcy, your LIT will sell some of your assets to repay your creditors. If you are discharged from Bankruptcy, you are released from your legal obligations to repay many of your unsecured debts.
Find Financial Assistance in Coquitlam-Port Moody
If you’re tired of dealing with debt alone and you’re looking for consumer credit counselling services in Coquitlam-Port Moody, reach out to a Licensed Insolvency Trustee. At Allan Marshall & Associates, our debt experts have the specialized training and experience needed to help you work through your debt issues, no matter how big or small.