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Debt is a problem that everyone faces from time to time, no matter where they are from. About half a decade ago, the people of Quebec were largely struggling with rapidly rising levels of debt. Things weren’t looking good, but over the last few years, the province managed to turn it around. Now, Quebec’s overall debt level is one of the lowest in the country and their financial delinquencies have dropped significantly.
However, despite those relatively promising statistics, there are still thousands and thousands of people who struggle every day with debt in Quebec. Many will try to deal with the debt on their own. Unfortunately, this isn’t always easy to do, as some people lack both the money to pay off the debts and budgeting/financial knowledge to get out of the hole by themselves.
What is consumer debt? Find out here.
Thankfully, whether you are in a big city like Montreal or a smaller city like Rimouski, there are several Quebec debt relief options at your disposal. However, if increasing your financial knowledge (while also having a professional to go over your options with) sounds like a good plan for you, you will want to look at credit counselling in Quebec.
Do you spring clean your finances every year? Learn how to get started here.What is Credit Counselling?
It is important for you to understand what credit counselling in Quebec is before getting into the details. In simple terms, credit counselling services exist to help you alleviate your debts through education, budgeting, and other tools, as you work alongside a trained professional.
While it doesn’t get rid of your debts for you automatically, it will give you the skills and tools necessary to learn how to deal with your debt, so that you can avoid getting in debt trouble again in the future. Of course, your counsellor and you will talk about the available options for you to ensure that credit counselling is the best choice for you, or if you would be better suited for another debt relief option.
How Does the Credit Counselling Process Work?
So, how does it work? The first step is to find a credit counselling agency in Quebec and reach out to them to see what programs they have. There is a good chance that your city or town will have at least one agency available. Once you have chosen an agency, you will begin to receive consultation from a professional counsellor, who will inform you of the ways you can reduce and eventually get rid of your debt. This will often include teaching you about budgeting, how to reduce your spending and more.
For more loans and programs to help you get out of debt, check this out.
Of course, for these counsellors to give you advice and help you, you will need to tell them about your personal information, debts, assets, income, spending, and financial goals. However, you need not worry about them judging you or releasing any of the information that you discuss together. It is a confidential service and you will be treated with respect.
Credit counselling agencies can also negotiate with creditors on your behalf, assist you with debt consolidation, and come up with a suitable debt repayment plan with you. They provide a very valuable service and have helped thousands of borrowers get out, and stay out of debt.
Click here to learn how long credit counselling generally takes to complete.
How to Tell if You Need Credit Counselling
When do you know if it is time for you (or a friend/family member) to take advantage of credit counselling in Quebec? Well, the question is fairly difficult to answer, as it depends on each person’s unique life situation. Some people are perfectly fine handling large amounts of debt, whereas others don’t feel comfortable with any at all.
Basically, you should seek out credit counselling or another debt relief option once you feel you cannot manage your debt anymore, or if you simply want to increase your financial knowledge so you can stop your current level debt from getting worse. Each person will reach out for help at different times, so there are no right or wrong answers.
For a more detailed explanation of the signs that you need credit counselling, read this.
What to Look for in a Credit Counselling Agency?
Once you decide that credit counselling is something you want to consider, the next step is to find out which credit counselling agency that you want to work with. But what should you look for in an agency and how do you make sure that you choose the right one?
Well, the best way to start is by doing your own research. The internet is full of reviews and ratings of credit counselling agencies. Even your friends and family members in can potentially give you some good information. If a place has several bad reviews and a poor reputation, you might want to look elsewhere to make sure you are treated fairly. Try looking up the various credit counselling services in your area, see what you can find out about them, then make a choice based on what you find.
It also important to know that most credit counselling agencies will charge you a certain fee for their services, except for a few that are non-profit organizations. As a result, you may also have factor their price into your decision. Since you are likely already in debt when you decide to work with a credit counselling service, you should make sure you aren’t paying an arm and a leg. Of course, you also want to ensure the counsellors themselves are qualified and knowledgeable, so check out a few places and make sure the one you select is the best choice for your financial situation.
Want to know how to handle your first credit counselling session? Click here.
What Are Other Options to Consider?
While credit counselling in Quebec is a great option, it is not the only one to choose from when you are struggling with debt. You can decide to consolidate your debts (which is when you take out one larger loan to pay off multiple smaller ones) or even potentially settle your debt for less than the original amount. Of course, if your situation is quite dire, bankruptcy in Quebec might be the best option for you. However, bankruptcy should be the last resort, as it can severely damage your credit for many years.
Before you decide to file for bankruptcy, check out these other options.
Any good credit counselling agency should go over these other options with you, then help you make an informed choice that is right for you and your financial goals. They should be completely objective and not let their own biases or preferences get in the way of them choosing the best debt relief option for your situation.
Frequently Asked Questions
How does a consumer proposal compare to credit counselling?
Because consumer proposals are a legal agreement made between a debtor and their creditors, it is a bigger commitment to make. It comes with the advantage of being able to negotiate the total amount you have to repay to clear your debts to a fraction of the original amount. Credit counselling can only reduce interest rates or extend the time to repay your outstanding debts, but not the total amount itself. That said, it’s a voluntary agreement and stays on your credit report for less time than a consumer proposal.
Which credit counselling firms are reputable?
It’s best to find an accredited credit counselling service through one of many recognized associations. These include Credit Counselling Canada (CCC), The Canadian Association of Credit Counselling Services (CACCS), and the Canadian Association of Independent Credit Counselling Agencies (CAICCA). In Quebec, credit counselling services are also usually offered through the Associations coopératives d’économie familiale (ACEFs).
How will credit counselling affect my credit score?
While it will reduce your credit score, it won’t affect it as much as a consumer proposal or bankruptcy. Debts included in credit counselling will be given a poor rating of “R7” and last for 2 years in your file. Under a consumer proposal, the debts will still be rated an “R7” but will stay for 3 years. Debts that are covered under bankruptcy get the worst rating of “R9” and will stay for 7 years the first time and 14 years for a second bankruptcy.
Where To Find Credit Counselling in Quebec?
Getting a handle on your debt can be a confusing and irritating process. However, thankfully, you don’t need to do it alone. Quebec has a variety of options available for you, including credit counselling. If you’re interested in more information about what your debt relief options are, we can help.
