Navigating the Fee Infested Waters of Debt Counselling

There is a disturbing trend happening in the Credit Counselling Industry. Companies are popping up online with toll free numbers, promises of reduced interest rates and manageable monthly payments.

Enter “Credit Counselling” in your search engine and watch your screen fill with listings. I was overwhelmed after page 6!

I don’t want to knock all Credit Counselling Companies. Some do a great job of helping you reduce your debt payment, but how do you tell the good ones from the bad?

The following tips can help you navigate your way to inexpensive, preferably free, advice and services:

  1. Understand that there are no companies (to my knowledge) that will negotiate the interest rate you are paying on your debt. They will negotiate the “debt”. There is a big difference. Your credit rating WILL be affected.
  2. You do not have to pay for advice on options for dealing with debt. The Insolvency Industry is rich with knowledgeable, ethical, professional counsellors who provide this service for free.
  3. Seek out local firms. There are good, reputable Credit Counselling firms in most provinces. Many are not-for-profit Don’t deal with someone you can’t meet or who doesn’t have a physical office in your location.
  4. Get a second opinion. Talk to a Credit Counsellor AND a Trustee in Bankruptcy to ensure you have explored all of your options. If you are not comfortable with the person you meet with, meet with another. Be sure to ask for your information sheets so you don’t have to complete them a second, or third time.
  5. Your Credit Counsellor should contact your creditors and stop them from continuing to call you or from taking legal action against you. You should not have to deal with them once a settlement offer is in place. Beware of companies who take your money and advise you to ignore your creditors until they get desperate enough to settle. There’s a much better way to achieve a debt settlement.

I hope these tips help you navigate your way to good financial help.

Have a question you need answered? Ask Dr. Debt!


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