Monday, March 28, 2016

Consumer Debt Aid Achieved Through Counseling

Year after year, more and more Canadians are in need of consumer debt aid due to increasing financial troubles. In 2014, Bloomberg reported that Canada’s debt and income ratio per household reached its highest level between April and June. The report’s main focus is mortgage debt and how it affects the rest of the economy as families have less spending power when most of their income is going into paying off their expenses and bills.

Whether it’s sudden unemployment, an unexpected medical expense or maybe a mishandling of budget and funds, anyone can end up in with overwhelming financial trouble. This is why many would often turn to debt counseling. This is a common service offered by many financial organizations today. Debt counseling is all about providing advice on the best way to manage your money, present solutions and strategies that can eliminate your debt, and develop plans that can prevent future financial problems.

Consumer debt aid

Often times, companies will even offer the first session of debt counseling as a freebie. A session, which would typically last for about an hour, gives you an idea of your current situation and also gain a better understanding of your choices as you move forward in getting rid of your debt. Having said that, the Financial Consumer Agency of Canada (FCAC) advises Canadians to conduct research and get to know the debt counseling firm before signing anything or agreeing to anything. Additionally, they advise that individuals should look into more than one company and check their prices.

A good way to check the reputation of the debt counselor is by checking with the Attorney General or your local consumer protection agency to see if any kind of complaint or lawsuit has been filed against them. Once clear, you can also conduct an initial interview to see if they can legitimately help you with your financial problems. 

If for instance your problem is due to the fact that you are having a hard time paying off all your debt, some counselors may recommend that you make use of a Debt Management Plan (DMP). However, do not hastily enroll yourself into a DMP. First off, your counselor must have thoroughly reviewed your financial situation and considered all other possible options. Moreover, you must also have a budget and money management in place before implementing a DMP.

The DMP basically asks you to deposit a certain amount of money every month to your debt counseling agency. The agency then uses this fund to pay off all your debts by working out an agreement with all of your unsecured creditors. You must make regular payments or deposits until you are able to pay off your debt in full. While this option is certainly not applicable to everybody, there are a variety of other options available depending on your situation. A good debt counseling organization should be able to help you in choosing the right path to take.

Dealing with debt on your own is never a good idea. Consumer debt aid is always available. All you need to do is seek the help and guidance of a certified debt counselor.

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