Credit Counselling in Canada: Support & Debt Management Plans

Credit counselling can include one-to-one budgeting support, educational resources and discussion of a debt management plan. Both non-profit organizations and businesses offer these services. Check the agency’s reputation and the counsellor’s qualifications, and ask for a clear explanation of costs.

What a debt management plan does

A counsellor may propose an informal repayment arrangement to creditors. Participating creditors may agree to changes such as reduced interest. Do not assume that all debts are eligible, that every creditor will participate or that the quoted payment includes all fees.

An informal plan is different from a consumer proposal or bankruptcy. Ask about creditor action and what happens if an account is excluded or a payment is missed.

Questions to take to the agency

• Who is providing the counselling, and how are they qualified?
• Which services are free and which have fees?
• How much goes to creditors, and when?
• What happens if a creditor declines?
• How is the arrangement reported to credit bureaus?

Check the fit before agreeing

A repayment arrangement needs to work with the household budget, including irregular costs. If the proposed amount does not fit, ask about the other options rather than signing a plan you cannot maintain. Ask for the terms in writing.

Read the DMP and consolidation comparison or use FCAC’s guidance below to research an agency.