Licensed Insolvency Trustee Blair Mantin answers your questions about how to manage debts, including options such as debt consolidation, Credit Counselling, Consumer Proposals and Bankruptcy in Canada!
Q: Is Credit Counselling the same thing as a Consumer Proposal?
A: These two options are different, but credit reports reflect the same:
Credit counselling needs each creditor to agree to a program and 100% of the debt is repaid; creditors not agreeing are paid separately and can continue collection. Consumer Proposals only need 50% of creditor agreement to be binding on all; usually only a portion of the debt is repaid, but settles all in full.
Major banks accept Consumer Proposals and they are the only way to resolve government debts.
Credit counsellors have no set qualifications or regulatory body; miscellaneous fees are charged in addition to debt payments. Conversely, Licensed Insolvency Trustees are federally legislated and all costs are included in the offer to creditors – no hidden fees.