Category: Personal Bankruptcy

Credit Questions for Credit Counsellors 

Many people who are in financial difficulty are seeking help from credit counselors and debt management companies. Some of these companies are not-for-profit, others are for-profit. As a person in trouble how do you know who you are dealing with- more important- are they properly trained and is their primary purpose to help you or just charge you a fee. Notwithstanding your mental state before you sign their papers ask as many of the following questions as possible and make sure you are comfortable with the answers.

The Counsellor

– Are the persons you are talking with properly trained?

– Are they a certified credit counselor?

– Are they designated as having completed Accredited Financial Counselor Canada (A.F.C.C.) course of study?

– Have they completed the Insolvency Counselors Qualification Course from the Canadian Association of Insolvency and Restructuring Professionals and the Office of the Superintendent of Bankruptcy (Industry Canada)?

The Company

1. Is the company the credit counsellor works for a not-for-profit company or a for-profit company?

2. Is the company licensed by either the Federal or Provincial government to provide service to you? Do not confuse being licensed with a voluntary membership in an association such as the Better Business Bureau.

3. Does the company have an initial “no charge’ counselling policy or do you feel intimidated to “sign up” by their counsellor?

4. Is the company paid in full or in part by your creditors for any service they provide to you?

5. Are you expected to pay any fees to the company in addition to the settlement reached with your creditors? If so, ask how much are you required to pay and when do you have to pay the fees?

Assuming you sign up with the company:

-When do they notify your creditors that you are in their “debt program”?

– When does interest stop on your debts?

– What is the effect on your credit rating?

– Does the company notify Equifax Canada and/or Trans Union of Canada at the start and on the completion of your proposal to you creditors?

– Will the company immediately stop all lawsuits and pay garnishees against you? Some companies wait until your fee to the company is paid.

– Do you get copies of all documents?

– If money is paid to the debt management company for distribution to your creditors is the money held in a trust and bonded account?

– Are you entitled to receive a copy of the accounting of fees to the company and payments made to your creditors?

– Is the company licensed? If so –by who?

– Will the company put all of their answers to you in writing (before you sign up with them) and allow you to go home and decide what is in your best interest to do?

After the Debts Are Paid

Will the company and the credit counsellor work with you to reestablish yourself financially? Do they provide any scheduled financial counselling meetings while you are in their program? Will they assist in obtaining a credit card or improving your credit rating?

You are trusting yourself to someone you have only just met. Trust your instincts that you are dealing with the right persons at the best company for you.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.