Debt counselling in Toronto is a form of debt recovery process that
combines basic credit education on financial management and debt relief
services through a Debt Management Program or DMP. The main objective of this
type of debt relief program is to help the creditor gain control of his
finances and avoid a consumer proposal or personal bankruptcy.
What to expect in debt counselling
Debt counselling services are usually offered by nonprofit
organizations, and is typically the first option for debt relief that is
offered to people who are struggling with heavy debt but can still manage to
pay their bills.
To help the debtor get out of debt successfully and to prevent him from going back into debt again,
the program utilizes a combination of different procedures, such as budgeting
techniques, credit education, money management, debt consolidation loans, and
creditor negotiations, among many other strategies.
The entire process can take quite a while to complete, depending on
the amount of debt that you owe and the debt counselor’s’ ability to negotiate
an agreement with your creditors. Generally, you can expect the following in a
debt counselling:
- Discussions with a qualified financial counsellor on developing your budgeting skills and managing your spending habits
- Help from a debt counsellor to negotiate with your creditors and get them to lower or eliminate late fees and other negotiable charges that currently form part of your debt load
- Help from a debt counsellor to negotiate with your creditors and have them agree to stop all collection activities
- If you need to obtain a debt consolidation loan, a debt counsellor can provide assistance in finding a lender who can offer a low interest rate and a long amortization period which will help lower your average monthly payment amount.
- Help in developing a customized debt repayment plan which will allow you make one payment each month to the debt management company, who will take charge of dividing payments and forwarding these to your various creditors.
Where to find debt counselling help
Talking to a qualified debt professional is the very best way to
find out if debt counselling is the right option for you. To protect your
rights and best interest, make sure to
only deal with officially recognized or authorized debt professionals with many
years of experience. In Canada, these people hold the following designations:
an accredited debt counsellor, usually one who has obtained
certification through the Accredited Financial Counsellor of Canada (AFCC)
a Licensed Insolvency Trustee (LIT)
a qualified insolvency counsellor who is licensed by the Office of
the Superintendent of Bankruptcy
Each of these qualified professionals are bound by a code of conduct
that requires them to explain to you all of your options for debt relief. This
means that even if you don’t need to file for bankruptcy, you can talk to a
Licensed Insolvency Trustee and get guidance and recommendations on all legal
solutions that is best for your financial situation.
Through debt counselling in Toronto many Canadians find out that
they can take measured, reasonable steps to help them overcome their debt
problems over a period of time. The program can be a successful and very
positive experience for qualified consumers as long as steps are taken to find
a reliable debt counselor and the debtor is fully committed to the process of
getting help, getting out of debt and working on long-term financial security.