If you are having challenges managing your debt there are many solutions available. The solution you choose will largely depend on your personal and financial circumstances. The amount of debt that you have, for example, will change the financial solutions available to you.

Credit counselling Canada is a service that helps many Canadians deal with financial challenges. Credit counselling Canada, like any other financial solution, has its pros and its cons. While Credit counselling Canada can help Canadians with any amount of debt, you are best suited to consider it as an option if you owe $7,000 or less in total debt.

Credit counselling Canada is largely funded by creditors and is not for profit. The credit counselling agency will make a proposal to your creditors that allows you to make a reduced, fixed monthly payment each month. This proposal is not a consumer proposal and this proposal will not reduce your overall debt. It simply provides for a reduced monthly payment.

The main benefit here is that if you cannot manage your current monthly payments, this will enable you to do so. People who have payday loans and only payday loans are best suited to consider credit counselling Canada. Generally people who have multiple payday loans and no other debt only owe a small amount of money, so other financial options, such as a consumer proposal, are not available to them. Credit counselling Canada will enable someone who has expensive payday loans to make a single reduced monthly payment that they can afford.

The cons of a credit counselling program include:

• Damage to credit (likely damage to credit has already occurred though if you are not managing your monthly payments)
• Overall amount of debt is not reduced
• Depending on the repayment plan you negotiate, it could extend over many, many years

The cons that exist with Credit counselling Canada are the primary reasons why an individual who owes more than $7000 should consider other financial options rather than jumping into a credit counselling program.

A consumer proposal is often a better option than a credit counselling program. When a consumer proposal is arranged, it is formal and final. If your creditors accept a consumer proposal you have the option to pay it off in full at any time. While a consumer proposal can also have some negative impacts on your credit, your credit can often be repaired faster with a consumer proposal when compared to a credit counselling program. Evidence of a consumer proposal will be removed from your credit report three years from the date it is paid in full.

A consumer proposal may reduce the overall amount of your debt, and because you can pay it off in full, the ball is in your court as far as how long it takes for you to pay it off in full.

Generally speaking, if you have a financial problem that is resulting in an inability for you to make your monthly payments, or if you have too much debt, you should seek financial guidance. It is advisable to seek this guidance from an independent financial professional who you can hire to help you make the best financial decision and who does not work for the company that is providing you the services. For example, if you are considering a credit counselling program, do not go directly to the credit counselling agency because they will advise you based on the programs they have available, or if you are considering a consumer proposal, do not go directly to the trustee in bankruptcy or you may not get the best deal.

For more information about credit counselling Canada or to see if you qualify please visit www.debtcare.ca or call 416-907-2582.