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

Tax Season For the Self-Employed

This year the deadlines for filing your 2017 tax return are as follows: April 30, 2018 for personal returns and June 15, 2018 for self-employed persons. Keep in mind, however, that any tax owing must still be paid by April 30, 2018.

February 15, 2018

Business Concerns

Q and A: Tax Season

With income tax season in full swing, I thought it would be a good time to answer some common questions that I hear regarding government debt and tax returns.

February 10, 2018

Government Debt

Duties of a Bankrupt

Personal bankruptcy laws in Canada are governed by the Bankruptcy & Insolvency Act. Failure to complete your duties will delay your bankruptcy discharge so it is important you fully understand your requirements once you declare bankruptcy.

February 5, 2018

Bankruptcy