When people get into debt, and interest payments make paying bills off difficult, it’s time to ask for help. There are programs and services available, one of the most effective is credit counselling.
In Canada, there are many non profit credit counselling options. Many people ask how does credit counselling work in Canada? It starts with a phone call and a free appointment with an accredited credit counsellor, who will review all of your income, expenses and debts. She will help you build a budget and determine how much you have to pay down your debts.
If you don’t have enough money in your budget to keep up with you debt payments, she can offer you what is called a debt management program (DMP), also known as a debt consolidation program. The counsellor will contact all of your creditors, who most often will reduce the interest rate to 0%. Now that you are only responsible for the principle and not the interest, it’s easier to make the payments and eliminate your debt.
If you do start a DMP, you won’t be able to have credit cards or any other forms of credit for 2 years after your last payment, or 6 years, whichever is shorter. But once you are done, all of your debts will be paid off and you can qualify for credit again. Almost everyone who works with a non profit credit counselling agency learns how to stay out of debt, for good.
The best part is, credit counselling is private. Once you have completed your credit counselling program, there is no record of you using the service, which can’t be said for filing a consumer proposal or bankruptcy. With those, there is a permanent record listed with the Government of Canada. That is one of the positive consequences of credit counseling services.
The longest serving credit counselling society is Credit Canada Debt Solutions. It has been helping people get rid of debt for more than 50 years. If you want to have no more debts, call them at 1-800-267-2272 and speak to a counsellor today.