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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.
||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.
|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?
|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?
|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.
|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?
||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.
|What if I have a dispute?
||There is no dispute mechanism in place.
||You have the right to have your dispute mediated.