Area of Law: Credit, Debt and Bankruptcy
Answer Number: 0275
What is credit counselling?Region: Ontario Answer Number: 0275
Another alternative to filing for personal bankruptcy or to making a consumer proposal is credit counselling.
Credit counselling services
Most credit counselling agencies provide a number of different services to help you manage your finances and get out of debt. These include:
- budgeting and money management tools and information
- financial assessments – review of your spending habits, your debts, and your future goals
- one-on-one counselling regarding options available to you to pay your debt (consolidation loans, consumer proposals, bankruptcy)
- help making a debt consolidation plan or debt management plan with your creditors
- referrals to other professionals and services
Finding a credit counselling agency
Credit counselling services are offered by both not-for-profit organizations and for-profit companies. Before deciding to use the services of any agency, be sure the agency is qualified and trustworthy.
Find out if the agency:
- has now, or has ever had any serious or unresolved complaints made against it or one of it’s counsellors, such as for late payments to creditors or false advertising. You can confirm this information with the Better Business Bureau or your provincial or territorial consumer affairs office.
- belongs to and is in good standing with a provincial or national association which requires members to maintain specific standards of practice.
Provincial and national associations include:
- Credit Counselling Canada (CCC)
- Canadian Association of Credit Counselling Services (CACCS)
- Canadian Association of Independent Credit Counselling Agencies (CAICCI)
- Ontario Association of Credit Counselling Services (OACCS)
Before working with an agency, ask these questions first
Once you have found an agency you believe is trustworthy and qualified to help you, before enrolling in any programs, ask a number of questions, such as:
- what services does it offer and how much do they cost?
- does it offer a free consultation?
- will it provide you with a written proposal describing how it will help?
- will it provide you with monthly statements of payments?
- how many years of experience does it have?
- do the counsellors have any special education or training?
Training and qualifications
Although not a requirement, many credit counsellors are extensively trained and receive certification in the areas of personal finance, consumer debt and credit, money management and counselling.
The three most common specialized training courses and designations available are:
- The Accredited Financial Counsellor Canada (AFCC) designation from the Ontario Association of Credit Counselling Services (OACCS).
- The Insolvency Counsellor’s Qualification Course (ICQC), offered by the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).
- The Accredited Financial Counsellor, offered through the Association for Financial Counselling & Planning Education (AFCPE).
How to make a complaint about a credit counselling agency or credit counsellor
Each province and territory is responsible for regulating credit counselling agencies and investigating consumer complaints. To make a complaint, contact the Ontario Ministry of Government and Consumer Services.
If you are having experiencing problems with debt and managing your finances, credit counselling services can be useful in helping you decide whether bankruptcy is the right option. Many offer their services for free and services are always confidential. For more information on credit counselling services in Canada, visit the Financial Consumer Agency of Canada at canada.ca.
There are many options to consider when you are in a situation of financial difficulty. Filing for bankruptcy is a detailed and complicated process. Before deciding to file for bankruptcy, it is advisable to meet with a Licensed Insolvency Trustee or bankruptcy lawyer to review your situation.
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