Credit counselling is the best way to provide education around proper money management. This includes budgeting, proper use of credit and debit and also the repayment of debt. Licensed Insolvency Trustees are also credit counsellors. They can help you develop a monthly budget and assist you with following that budget to reduce your debt.
At Allan Marshall and Associates, our trustees can provide a range of options for you, whether you simply need budgeting advice and better money management to pay bills, or a more concrete solution such as a Consumer Proposal or bankruptcy. How do you know if you may need credit counselling? There are warning signs to indicate that it may be beneficial for you. For instance, if you have outstanding debts that exceed your income and do not know where to start, you may wish to seek credit counselling. During counselling sessions with a Licensed Insolvency Trustee, they will assess your finances and discuss goals such as:
- Cutting unnecessary expenses and splurges.
- Focusing on paying off debts with higher interest rates
- Reviewing non-essential assets that can possibly be sold
Some of these goals may solve immediate financial problems, but the session may also help you evaluate whether you are able to repay your debts or should consider alternative solutions. Keep in mind, it’s impossible to erase information that is part of your credit history so improving your credit score takes time. You have to prove to your creditors that your habits have changed and that you are willing to pay back your debts on time.
What About Credit Counselling Companies?
There are many benefits of using a Licensed Insolvency Trustee instead of a credit counsellor from a credit counselling company.
- Credit counselling companies, even not for profit, are often paid a fee from the companies you owe for collecting the money from you. They may also request you to pay a fee for negotiating repayment terms with your creditors. Care should be taken by debtors that they allow themselves sufficient income for a reasonable cost of living before committing to any payment schedule from outside credit counselling programs. Licensed Insolvency Trustees are restricted on what they can charge by the Bankruptcy Insolvency Act. They also provide free consultations and no upfront fees.
- Credit Counsellors may be limited to just one approach and may not have the background to be able to provide alternative debt solutions. A Licensed Insolvency Trustee is required by law to discuss ALL options for your debt relief.
- Credit Counsellors are not federally licensed and do not have any power over your creditors. A Licensed Insolvency Trustee can provide you with full protection from creditors by filing a Consumer Proposal or bankruptcy. Filing a Consumer Proposal stops interest and penalties and often can be less expensive than credit counselling programs.
Before committing to a credit counselling program elsewhere you should talk to a Licensed Insolvency Trustee firm. Allan Marshall & Associates Inc. will discuss with you all of your debt options.
Common Credit Counselling Questions
How is Credit Counselling different from informal debt settlement?
- An informal debt settlement is action taken by yourself, the debtor, to contact your creditors and negotiate debt repayment terms. Credit counselling is offered by a trustee who can contact creditors on your behalf and provide you with education and counselling throughout your repayment plan.
Many places offer credit counselling services, how do I know if it is reputable?
- First, avoid any credit counselling service that promises to make all your problems go away overnight or promises to erase ALL debts in one payment. They are often disreputable agencies that may use fraudulent tactics and can charge you fees that you will never see again.
- The goal of credit counselling is NOT to make all financial problems disappear miraculously, but to guide you through the process to change your financial habits yourself. With the help of a Licensed Insolvency Trustee, you receive a free consultation to review your finances. You’ll be able to see if credit counselling may be all you need to get over that hump or if other services may be of more benefit to your situation.
The information contained on this website is intended as a general summary of options, when dealing with financial problems, and is not intended to replace professional advice. We encourage you to contact Allan Marshall & Associates Inc for a free consultation to discuss your options.
Call toll-free: 1 (888) 371-8900
Contact us today to learn more about proper money management and debt repayment strategies to help manage your finances.