What do credit counsellors do?

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In Canada, credit counsellors are your go-to guides when juggling debt. They offer financial check-ups, personalized budgeting, and debt relief strategies while negotiating with creditors for friendlier payment terms. They help structure debt programs and teach money smarts to prevent future debt issues. Remember, credit counsellors differ from Licensed Insolvency Trustees, who handle more severe cases like consumer proposals and bankruptcies. Reach out via phone, text, or live chat if you have any questions.

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What Credit Counsellors Do Question

What do credit counsellors do? I’d like to know more about what credit counsellors actually do and how they support people like me who are struggling with debt.

From: Anonymous Question
Location: Toronto, Ontario (ON)
Category: debt management plan

What Credit Counsellors Do Answer

In Canada, credit counsellors are like financial lifelines for folks juggling debt. They take a deep dive into your financial health, mapping out your debts and crafting bespoke budgeting plans. Their toolkit includes advice on budgeting, debt relief tactics, and achievable repayment plans. These pros are your advocates, cutting deals with creditors for friendlier payment terms and setting up structured debt programs like Alberta’s Orderly Payment of Debts. This neat setup lets you bundle up payments and silence pesky creditor calls. They’re also great teachers, offering ongoing lessons in money smarts to dodge future debt hurdles. And when needed, they help you explore solutions like debt consolidation loans or consumer proposals.

Here’s the big distinction—credit counsellors aren’t the same as Licensed Insolvency Trustees (LITs). While counsellors focus on voluntary paths and financial coaching, LITs deal with heavier stuff like bankruptcies. Many counsellors operate as non-profits, which means they’re not in it for the big bucks, though it’s wise to stay sharp and informed, as not every trustee can be your financial BFF. Engaging with a qualified credit counsellor can often mean a softer hit on your credit rating than going the bankruptcy route, supporting a steadier financial future.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

Credit counsellors provide a variety of services to individuals struggling with debt. They primarily:

1. Assess Financial Situations: Credit counsellors evaluate clients’ financial situations, including income, expenses, debts, and assets, to understand their unique circumstances.

2. Budgeting Assistance: They offer guidance on creating and maintaining budgets, helping clients manage their finances more effectively.

3. Debt Management Plans: Credit counsellors can design custom debt management plans that outline strategies for repaying debts while considering clients’ financial capabilities.

4. Negotiation with Creditors: They may negotiate with creditors on behalf of clients to lower interest rates, reduce monthly payments, or settle debts for less than owed.

5. Education: Credit counsellors provide education on financial literacy, including topics like credit scores, financial planning, and responsible borrowing.

6. Support and Guidance: They offer ongoing support and counseling to help clients stay motivated and accountable in their journey towards managing or eliminating debt.

These roles align with the guidelines set out under the Bankruptcy and Insolvency Act, particularly in ensuring that consumers have access to professional advice and resources to manage their financial challenges (Bankruptcy and Insolvency Act, RSC 1985, c. B-3). Additionally, credit counselling must comply with regulations highlighted in C.R.C., c. 369, SOR-2007-256, and C.R.C., c. 368.

From: OSB Helper

Related Questions to What Credit Counsellors Do

Here are the top 5 most frequently asked questions related to what credit counsellors do, based on the provided sources and general online trends:

1. What services do credit counsellors offer?

Credit counsellors offer services such as creating spending plans, debt consolidation, stopping collection calls, and providing alternatives to bankruptcy[1][3][5].

2. How can credit counsellors help with debt management?

Credit counsellors help by creating personalized debt repayment plans, reducing or eliminating interest charges, and consolidating debts into one affordable monthly payment[1][3][5].

3. Are credit counselling services free and confidential?

Yes, many credit counselling services in Canada are free and confidential, provided by non-profit organizations with certified counsellors[1][3][5].

4. What qualifications do credit counsellors have?

Credit counsellors are typically certified as Accredited Financial Counsellors (AFCC) and are professionally trained to handle various financial situations[1][3].

5. Can credit counsellors help with specific types of debt, such as credit cards or personal loans?

Yes, credit counsellors can help with unsecured debts like credit cards, personal loans, payday loans, and other types of debt not backed by collateral[1][3][5].

If you have a question about debt see our debt questions or ask your own debt related question.

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