How does Credit Counselling differ from a consumer proposal?

Wednesday, May 3, 2017 - 22:52

Consumer Proposals, Credit Counselling


Credit counseling agencies cannot provide a guarantee that the amount you owe will be reduced, interest will be stopped or creditors will stop calling or continuing legal actions. Arrangements with credit counseling agencies are not legally binding and will appear on your credit report for three years upon completion of the counseling program.

Credit counseling agencies also derive a large portion of their income by charging you fees on top of your total debt load and often receive rebates from the creditors that you owe. Credit Counselling agencies are not regulated by the government and in many provinces are registered as collection agencies.

Consumer proposals will stop interest, stop harassment from creditors and has the ability to reduce the total amount owed. A consumer proposal is administered by a licensed insolvency trustee and is regulated by the government.

Once a consumer proposal is accepted by creditors, it becomes legally binding and replaces any pre-existing contracts between the debtor and the creditors. A licensed insolvency trustees fees are subject to government tariffs and regulation and the trustee does not receive any additional income or payment from creditors.

If you’re looking for a solution to your debt problem, consider seeing a licensed insolvency trustee before meeting with a credit counselor. Your initial appointment with a trustee at Welker and Associates is always free and we can review all of your options with you - including the option of using a credit counselor. After meeting with us, if you still believe it’s in your best interest to contact a credit counselor, we will gladly steer you in the direction of credit counselor that we that we have partnered with. All of the credit counsellors we have partnered with are not-for-profit United Way sponsored agencies and members of the Ontario Association of Credit Counselling Services.

Our partner credit counselling agencies share our desire to help Ontario residents solve their money problems.

Latest Posts

Can you inherit debt if a family member dies?

Typically when someone dies, their personal debt does not get passed on to surviving family members. Their debt belongs to them and them alone; it is not passed on to their family members when they die.

December 6, 2017

Bankruptcy, Debt and Relationships