Credit counselling is a process designed to help people reduce debt and live debt free. Typically, you work directly with an accredited credit counsellor who will review your entire financial situation and speak to you about your options. Your counsellor will create a custom debt management program for you, along with an easy-to-follow budget you can use to accurately track your finances over time.
Credit counselling is extremely effective at helping people get and stay out of debt. Here are three reasons why credit counselling works.
- It provides financial education. There’s an old adage that says, “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.” This saying could also be applied to financial education. When you have the knowledge, skills and confidence to manage your money, you are more likely to make better financial decisions that will not only get you out of debt but keep you out of debt
- It has long-lasting effects. One in five Canadians who filed for bankruptcy in 2018 was doing it for at least the second time. Credit Counselling has a repeat rate of less than 1% versus a repeat rate of 22% for insolvency trustees. With credit counselling, it’s not just about wiping your debts away – you’re given the budgeting skills and techniques required to be able to successfully manage your money and live within your means for the long term.
- It gives you pride. Did you know that eight in 10 residents of Nova Scotia and New Brunswick are highly inclined to pay back all their debts, and that 86% of Atlantic Canadians would prefer to pay off debt over a longer term, compared to going bankrupt in the short term? Being able to take ownership of your debts and pay it off yourself – regardless of how long it takes – gives a sense of pride and accomplishment. Credit counselling programs are designed to help you solve your debts and feel proud of how you did it.
Additional benefits
Save time and money
Credit counselling is not only an effective way to get – and stay – out of debt, but it also has added benefits that can save you time and money. When you sign onto a debt management program with a credit counselling agency, your credit counsellor takes on all communication with your creditors, saving you time. You no longer have to communicate with them. Additionally, your debts are renegotiated, typically resulting in a lower interest rate. This means you’ll pay less in the long run. Furthermore, because the agency is managing your debts for you, you only have to make one payment to the agency, who then disburses the money to your creditors. You’ll no longer have to make multiple payments to your various debts, which can also save you time.
Discover unknown options
There are options that consumer credit counselling can present that you might not have known about, such as debt consolidation and debt settlement services. Those who need help getting out of debt may be considering declaring bankruptcy because they don’t know that there are other options, such as having the credit counselling agency renegotiate a new payment plan. When you go to a credit counsellor, especially a not-for-profit credit counselling agency, they will always have your best interest at heart and will help you try to avoid bankruptcy wherever possible.
Conclusion
Credit counselling is an effective way to get out of debt. At SolveYourDebts.com, we give you the skills and habits you need to manage your money over the long term. As a non-profit credit counselling agency, we offer low-cost, impartial and professional services that put your needs first. We believe this is an essential ingredient in helping you solve your debts as quickly and painlessly as possible
It takes a lot of hard work and discipline to work your plan – but living debt-free is achievable if you are willing to work for it. Contact us today to learn more or to book a free consultation.
