Is it the right option for YOUR debt needs?
Terms like debt consolidation, debt refinancing, financial counselling, debt management programs, debt reduction services, debt settlement and credit counsellor versus Trustee in Bankruptcy can all be very overwhelming to a person with debt problems. Take the time to learn the facts before choosing credit counselling or some form of debt settlement as the right option to get out of debt. Although many people turn to friends, family or Credit Counsellors for clarification, advice and to developed a debt repayment plan, there is often misinformation and myths about bankruptcy passed on to the debtor. Before proceeding with a Credit Counsellor to resolve your debt problems, also seek the free no-obligation advice from a Licensed Trustee. John Adamson of Adamson & Associates is an expert at settling debt problems. He will explain the pros and cons regarding your options of a debt repayment plan, a Consumer Proposal or filing for Bankruptcy to resolve your financial challenge.
What is Credit Counselling?
Credit counselling, also known as a debt management program, allows you to consolidate certain debts like credit cards and unsecured loans. Usually the credit counsellor will negotiate a reduction and often the elimination of interest, for a period of time. In order for the program to be successful, all creditors must agree. Some types of debts cannot be included, such as government debts.
Because you have to repay all of the debt, your monthly payments are usually higher than in a consumer proposal. Also, 100% of your creditors must agree to your debt management program if it is to be successful. In a consumer proposal by a Trustee, you only require a majority of your creditors (majority by dollar value) to accept the proposal and when that happens, the other creditors are legally forced to accept the proposal. Once the proposal is filed by a Trustee, creditors or collection agents may not call you or garnish your wages.
What is a Credit Counsellor?
A Credit Counsellor is an individual who can assist you with your debt problems, with the goal of helping you avoid filing for bankruptcy. For a fee they will assist by setting up a debt repayment plan, usually over a period of up to 5 years, to present to your creditors. Once the plan has been accepted by your creditors, you start making your monthly payment to the Credit Counsellor. They collect their fees and forward the balance to your creditors to pay the outstanding debt.
The two types of Credit Counsellors are Independent Credit Counsellors and “non-profit” Credit Counsellors. Non-profit counsellors get their funding from credit grantors like credit card providers, stores and banks.