Are there advantages for a person using the services of credit counsellors vs. Trustees? Let’s consider the facts and then you decide. Remember, that your objective is to get out of debt and re-establish a good credit rating in an honourable and cost-effective way, as quickly as possible.
|Key Considerations.||Credit Counsellors.||Trustees: Bankruptcy or a Consumer Proposal.|
|When will my debt be erased from the credit bureau?||3 years after the debt is repaid.||Bankruptcy: 6 years after the|
discharge. Proposal: 3 years
after the Proposal is satisfied.
|Can I pay back less then I owe and have the rest of the debt erased?||Only in rare circumstances.||Yes.|
|Once I make a plan with a credit counsellor or file for bankruptcy or a consumer proposal, will my creditors, including CRA, be forced to stop all actions against me including trying to collect money; phoning me; garnisheeing my wages or repossessing my assets?||No||Yes.|
|Which will give me a better credit rating?||In most circumstances a|
bankruptcy or proposal will give you a better credit rating, in a shorter time, and at a lower cost.
|Can income tax debt and other CRA debt be included and eventually written off?||No.||Yes.|
|Is the advice given without a conflict of interest and in my best interest?||Some so called “non-profit” credit counsellors are funded by banks and other credit grantors so there can be a conflict of interest.||Yes.|
|What training and education do credit counsellors and trustees in bankruptcy have?||There are no set standards.||Most trustees have accounting|
degrees and all must complete and pass a rigorous 3-year course and be investigated by the RCMP. Ongoing training is mandatory.
|Are they regulated?||No.||Yes, by the Federal Government.|
|What kinds of plans are offered?||Payment plans, where monthly|
payments are made, which are
distributed to the creditors.
|Bankruptcy and two kinds of|
|Which is cheaper?||A bankruptcy or a proposal is usually cheaper.|
|Is Government approved Credit Counselling offered?||In some cases.||Yes.|
|What if I have a dispute?||There is no dispute mechanism in place.||You have the right to have your dispute mediated.|