There are increasing levels of credit card debt in Canada and an increasing need for counselling services for credit. As at November 30, 2014, canada.creditcards.com reported $75 billion in credit card debt across Canada, up another 2.3 percent from the prior year. 52 percent of Canadian households and 60 percent of Atlantic-province households had credit card debt in 2014.
Getting counselling for credit is an educational service where consumers can openly discuss their financial situation and learn how to property manage their money, live within their means, and keep debt at a controllable level. The goal of counselling is to help consumers establish financial stability through financial guidance or help in avoiding bankruptcy.
The service begins with a complete review of your financial situation, including your income, expenses, debts and assets.
Professional advice is then provided to help you develop and manage a budget, learn about debt management, and work on rebuilding credit. Many counselling services also negotiate with creditors on your behalf to reduce interest rates and late fees.
Some of the benefits of counselling are as follows:
– Your confidentiality is maintained
– Your participation is voluntary unless you are filing for bankruptcy, in which case your participation is mandatory;
– The service is offered free or at a minimum fee, depending on what is needed;
– Sound financial knowledge/financial literacy skills are taught;
– Budgeting skills are taught;
– The service is personalized to your unique financial situation;
– The service can avoid bankruptcy where overspending is involved;
– The counsellor may be able to negotiate on your behalf with your creditors to reduce interest rates and late fees; and
– The counselor in credit may be able to offer you a debt consolidation loan, which can reduce the interest rate of your total debt, lower your monthly fees, and give you flexibility you to pay each month on your preferred date (e.g., the first or fifteenth of the month or whatever date you select).
Consumer credit services are viewed by many people as a favorable alternative to bankruptcy. Most of them try to get you completely out of debt in 5 years or less and this can work if you make the agreed monthly payments on time. If you want to learn more about credit counselling services, contact us at WBLI in any of our 17 offices across Nova Scotia and New Brunswick. Call us at 1-800-495-5909 or 902-482-2000.