Getting out of debt is the first step toward a bright financial future. There are tons of benefits to becoming debt-free, especially when it’s high-interest loans or “bad debt” like credit card balances that are holding you back.
When you’re carrying less debt, you have more money to invest, earning interest instead of paying it. Your credit score will also benefit, making it possible to qualify for lower interest rates in the future.
But getting there isn’t necessarily easy. If money’s tight and you’re struggling to keep up with bills, you can get assistance through credit counselling on Vancouver Island with a Licensed Insolvency Trustee.
The Initial Assessment
Licensed Insolvency Trustees should offer a free initial consultation, at which point they will assess your finances. They will then advise you on the best way to proceed. They may suggest options like debt management, debt consolidation, filing for bankruptcy, or a consumer proposal, depending on the specifics of your situation.
Only Licensed Insolvency Trustees can help you with filing for bankruptcy or a consumer proposal; however, other professionals can assist with debt management and consolidation.
Credit Counselling on Vancouver Island During a Proposal or Bankruptcy
Filing for a consumer proposal or bankruptcy is an effective way to get debt relief and settle your accounts with creditors. As part of the process, you’ll go through two credit counselling sessions that are conducted one-on-one with an experienced insolvency counsellor.
The goal of these sessions is to help you avoid insolvency again. Filing bankruptcy for a second time will remain on your credit history for even longer, and debt always has a negative impact on your financial future.
A counsellor will work with you on improving money management, identifying financial danger signs, and learning how to use credit productively. You’ll come out of credit counselling with a better idea of how to achieve your long-term financial goals and avoid debt in the future.
Other Types of Credit Counselling
There are other types of credit counselling not offered by Licensed Insolvency Trustees, usually using the term “Credit Counsellors.” They offer services like negotiating with your creditors and payment arrangements. They may be able to save you some money on interest charges, but keep in mind that unlike a Licensed Insolvency Trustee, they are not required by industry regulation to advise you of all your debt relief options. These types of services aren’t as closely regulated, either.
They also don’t have any means to stop legal actions from creditors or calls from debt collectors. Whereas filing for bankruptcy or a consumer proposal will bind all creditors in a debt settlement arrangement, that doesn’t apply to any arrangements made without a Licensed Insolvency Trustee.
If you can get out of debt without filing for bankruptcy or consumer proposal, and do it in a reasonable amount of time, that can be great for your finances. But there are other mechanisms available that you can use to find relief and start over sooner.
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