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What Is Credit Counselling?

Credit Counselling combines debt consolidation and a formal consumer proposal. Reduce your financial problems. Lower your debt. You stop all collection calls, and get possibly lower interest and  monthly payments.

It will take up to 5 years to pay down your debts with Credit Counselling

Why Credit Counselling May Be A Bad Choice

Credit Counselling Is NOT Free.

Credit Counselling services, including the so called non profit firms, make their money by charging you fees and commissions either directly or hidden. They are not free.

Know that the banks and credit card companies fund most credit "counselling" agencies. This makes economic sense since it helps save the banks the high costs of collections.




You might consider a credit "counselling" program now which will stop creditors from harassing you.

You can then investigate a formal consumer proposal or bankruptcy.

Consumer Proposals permit you to make a proposal to your creditors to pay off your debts.

Consider that a formal consumer proposal or bankruptcy may well permit you to recover a good credit rating much faster than credit "counselling". Negative credit items remain on your credit report for to seven years. This would include the records of your credit "counselling" and a list of your "bad debts."

Bankruptcy will "cancel" your debts with strict provisions. It also remains on your record for up to seven years, but you may well be able to re-establish credit after a couple years.

Know that the banks and credit card companies fund most credit "counselling" agencies. This makes economic sense since it helps save the banks the high costs of collections.




So called Credit Counselling is really a combination of debt consolidation and a formal consumer proposal

You benefit from the instant relief from collection calls, and possibly lower interest and lower payments.

There is no counselling and the people who offer the service make their living by fees and commissions earned by collecting your monthly debt payments and passing them on to your creditors.

Any one can experience debt problems. The important thing to remember is that you have options.

Many credit counsellors are just plain sales people with no training, no licence and get paid on commission



To qualify for credit counselling, you must be able to afford to repay you debts in full within five years.

Credit counselling companies  provide "counselling" for people in debt and helps devise repayment plans for consumers with financial difficulties.

Your credit counsellor will help you work out a budget and find a monthly payment you can afford.

Generally your program will include all your credit cards and may also include unsecured debt, personal loans or lines of credit and even some payday loans. Your credit card accounts will be closed when you complete the program.

  • Offer guidance on money management and budget planning,
  • The counsellor will contact all your creditors with a proposed payment plan which includes reduced debt and interest costs.
  • Your creditors must accept the plan, but generally they do so.
  • Help arrange repayment schedules affordable to the debtor and acceptable to the creditor.
  • Once the plan is approved you will be making one monthly payment to the counselling agency who will distribute it to your creditors as planned.
  • assist in developing personalized budgets and advise on bankruptcy procedures.
  • Arrangement with creditors, through a debt management program.
  • Most payment plans run for about 36 to a maximum of 60 payments. (5 years)
  • Counselling is an alternative to going bankrupt
  • Rebuilt credit through credit rehabilitation

There have been frauds where consumers gave the credit counselling service their payments and the payments were never sent on to the debtor.

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