Credit Counsellors in Canada come in many guises. There are Debt Consultants who advertise themselves as “non-profit credit counsellors” or simply, “credit counsellors”.

These are companies, who advertise their services to people in debt, stating they can get them out of debt, but only want to charge them a fee and then to refer them to a trustee.

Consumers should exercise caution when dealing with credit counsellors in Canada.

The ones who say they are non-profit credit counsellors are funded by credit grantors and may have a conflict of interest. Most put the funding estimates at a 20% kick-back on collections, in addition to the 10% they collect from debtors. Will they have your best interests at heart or the credit grantors, who fund them?

Read some more about credit counsellors here.

Credit counsellors in Canada who do not say they are non-profit are independent

These credit counsellors do not receive kick-backs from credit grantors. Consumers should exercise their normal caution when dealing with these credit counsellors.

Debt Counsellors are a special type of Credit counsellors in Canada. 

They usually advertise for debtors come to them for them for adviceThey collect fees from the debtors and then refer them to a trustee for filing a bankruptcy or a consumer proposal.

Caution! They will charge you for services a trustee will provide for free.

The Superintendent of Bankruptcy has issued this warning about Debt Counsellors.

There are also credit counsellors in Canada you meet at trustee offices.

These are the people who conduct the two counselling sessions that every person filing bankruptcy and a consumer proposal must take in order to be eligible for a discharge.

The objective for the first-stage counselling is to provide the debtor with counselling advice regarding the following:

* Money management;
* Spending and shopping habits;
* Warning signs of financial difficulties;
* Obtaining and using credit.

The objectives for the second-stage bankruptcy counselling are to:

* Determine budgetary and/or non-budgetary causes of the insolvency;
* Follow up on the debtor’s application of the principles presented in the first stage;
* Assist the debtor to better understand his or her financial strengths and weaknesses;
* Assist the debtor to better understand his or her behaviour in financial management and consumption habits;
* Make the debtor aware of resources available that will assist in achieving and maintaining economic stability; and
* In cooperation with the debtor, develop a plan of action including, if appropriate, referral for specialized counselling for non-budgetary causes of debt.