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Credit Counselling Vancouver Island – What You Should Know

Credit Counselling Vancouver Island

If you’re facing financial difficulties and can’t seem to fix your debt issues alone, you might consider credit counselling on Vancouver Island. Credit counselling can help you understand the root of your debt issues and provide the financial knowledge and tools you need to change your money habits in the long term. 

A Licensed Insolvency Trustee (LIT) is a federally regulated debt professional that can provide all of the debt relief options available in Canada. You can work with an LIT to determine if credit counselling is the right solution for your issues or if you should pursue a more formal debt relief option such as a Consumer Proposal or Bankruptcy. 

What is Credit Counselling Vancouver Island?

Consumer credit counselling services on Vancouver Island can include one-on-one counselling or group sessions that provide education on topics, such as budgeting or proper credit use. Working with a credit counsellor can help you improve your financial literacy and learn skills and tools to get out of debt and stay out of debt. 

You can find credit counselling on Vancouver Island at not-for-profit and for-profit companies.

Since credit counsellors aren’t legally required to have specialized training, it’s important to ask several questions when searching for a credit counsellor on Vancouver Island, including: 

  • Qualifications. Ask potential credit counsellors to explain their education, experience, and if they have any specialized training. 
  • Fees. Inquire about what fees you can expect. Is there an initial set-up fee, monthly administration fee, or any membership fee? 
  • Services. What services does the credit counsellor provide? One-on-one counselling, credit consolidation, or debt management plans?

When looking for a credit counsellor, look for red flags. If a company makes offers that sound too good to be true, such as promising to solve your debt or credit problem quickly, think twice before working with them. 

Licensed Insolvency Trustees have the specialized training and experience to provide consumer counselling, along with all other debt help and relief plans. LITs are also federally regulated by the Office of the Superintendent of Bankruptcy, which means they must meet specific qualification criteria. LITs fees are also regulated, so you never have to worry about being overcharged. 

What is a Debt Management Plan?

A debt management plan is a service offered by some credit counsellors. A debt management plan, also known as a debt consolidation program, allows you to consolidate your debt into affordable monthly payments. Your credit counsellor creates an informal proposal that they present to your creditors on your behalf in which they may request your interest payments be eliminated or reduced, or that you have more time to pay your debt.  

A debt management plan is completely voluntary, meaning your creditors do not have to agree to your counsellors proposal. If your creditors don’t want to participate, you may still need to pay the credit counselling agency fees. 

If you participate in a debt management plan, it will show up on your credit report and hurt your credit score. The record is removed from your report two years after you pay off your debts. 

Alternatives to Canadian Credit Counselling 

Debt counselling is the right solution for many individuals wanting to improve their financial knowledge and learn new money management strategies. However, if you have significant debt and want debt relief, you might benefit from a more formal debt solution such as a Consumer Proposal or Bankruptcy. 

Consumer Proposal

A Consumer Proposal is a legal process that can only be administered by a Licensed Insolvency Trustee in Canada. In a proposal, you work with your LIT to develop an offer to your creditors to pay a portion of your debt, extend the time you have to pay, or both. You have a maximum of five years to repay your debt. In a Consumer Proposal, you can retain secured assets such as your house and car as long as you continue to make your payments. 

Bankruptcy

While no one wants to file for Bankruptcy, in some situations, it’s the right choice. The purpose of Bankruptcy is to provide honest Canadians with a fresh financial start. Bankruptcy is a legal process that can release you from most debts. Similar to a Proposal, an LIT is the only professional in Canada authorized to administer a Bankruptcy proceeding. 

Find Financial Assistance on Vancouver Island 

Whether you want to improve your financial knowledge and learn how to budget, or you’re struggling to pay your bills, a Licensed Insolvency Trustee has the expertise and experience to help you navigate any debt issue. From debt counselling to Consumer Proposal and Bankruptcy, an LIT can explain all of the debt options available and help you decide which one is right for you. 

You don’t have to deal with your debt alone, we can help. Reach out to one of our debt experts today at 1-888-371-8900, or fill out our online contact form and someone will get back to you. We Can Help.