Overcoming Debt a Step-by-Step Guide to Credit Counselling

August 24th, 2022
Overcoming Debt a Step-by-Step Guide to Credit Counselling

One of life's greatest challenges is handling and managing debt. No matter how you ended up in the current situation you're in, there's no denying you need help; And that's okay. Life can take people down hundreds of different paths and sometimes, it may lead you down a troubled one that you need assistance and guidance to help you get out of it. It's good that there are people and professionals equipped to help you.

Credit counselling services and Licensed Insolvency Trustees are available to all Canadians that want to overcome debt. While it might not be an easy task, it is entirely doable.

If you are interested in taking that first step, here's what you need to know:

Where to Start

The first step to getting out of debt is deciding to do so and taking action. It's not easy, but it is the first crucial step in the process. It will not happen overnight. You need to be ready to face the challenge head-on. No matter what you are in debt for, you have the power to get out of it.

Begin by getting a free initial consultation or assessment. A free consultation will give you an idea of whether you can get help from a credit counselling service or Licensed Insolvency Trustee.  This will be done by calling them, reaching out online or even by filling out a short questionnaire.

The consultation will also help you to determine if you can get help. You should take the evaluation seriously and be as honest as possible. Your response will help determine your eligibility, and you will receive a personalized recommendation and a list of credit counselling agencies and Licensed Insolvency Trustees that can assist you.

The Next Step

After you have received a consultation, you have the choice of contacting one of the agencies on the list provided to you. A Licensed Insolvency Trustee or one of their credit counsellors can be a great source of help. They are there to assist you on the journey you are undertaking.

The help that they offer is there to support you. They are there to help you find ways on how you can reduce your debt or elimintae it all together. They can also help you find ways on how you can manage your finances better.

Some of the services that credit counselling agencies can offer you include budgeting, debt relief and debt consolidation. 

1. Debt Management Programs

Debt management programs are often referred to as DMPs. As the name implies, these programs are comprehensive. They are effective in helping you get out of debt.

DMPs are considered to be the best option when it comes to debt relief. They allow you to pay less than you usually would. You still get to keep the same payment levels but with less interest. Many people find these programs to be easier to manage than others. They also find them to be better than bankruptcy.

2. Debt Consolidation

Debt consolidation can be a great way to get out of debt. It is considered a quicker and more effective solution to debt relief. It is a process that involves the combination of all your debt into one single loan. 

The good thing about debt consolidation is that it helps you to save money. This is because you will only need to pay one loan instead of multiple loans. This will help to reduce the amount of money that you will need to pay.

3. Consumer Proposals

A consumer proposal is a legally binding agreement between you and your creditors to create new payment terms. It stops the interest, stops collections and legal action, and often includes a reduced amount of the unsecured debts you owe over a specific timeline. It allows you to offer  new payment terms while also allowing creditors to ability to vote on the proposal and allow them to recover a greater amount of money than if you were to file for bankruptcy.

Consumer proposals are administered with the help of a Licensed Insolvency Trustee (LIT). The trustee will help you formulate the proposal which will demonstrate that you are reasonably able to pay back some percentage of your total debt back with a payment plan over a set period of time.  

The Bottom Line

Getting out of debt is a great thing to do. It's a way to take control of your finances. It is also a great way to maintain a healthy financial situation in the long run. It can be a challenge, but it is a doable one. A Licensed Insolvency Trustee is a professional who will help guide you though your options and help you discover your fresh start.

Solving financial problems is much easier with the help of Paul J. Pickering and Associates Limited.    We have over 30 years of experience in helping our clients resolve their financial problems. We specialize in debt management, proposals. consumer proposals, debt counselling, credit counselling and bankruptcy in London, Ontario.  Whether you’re starting to get overwhelmed and you don’t know how to handle your debts and minimum payments, contact our office today for your free initial consultation, and we’ll put together a plan that will work for you!  Contact us today and let us help you make a fresh start with our debt relief solutions.