How to Choose the Right Credit Counselor to Get Out of Debt

By: Hank Peterson

Canada's debt load has worsened since the global financial crisis. Today, total consumer debt, which does not include mortgage debt, stands close to $600 billion. The average household faces a debt load of approximately $22,000, and there aren't any signs of this slowing down.

With interest rates staying at historic lows and consumers' appetite for debt remaining strong, Canadians need some sort of relief. This type of relief can be produced by credit counselors.

All over Canada, there are numerous credit counseling services popping up. From British Columbia to Nova Scotia, you can find at least one credit counseling organization in your neighbourhood, whether it is non-profit or government-funded. Finding one is your first step.

But how do you actually go about choosing the right credit counseling service? It doesn't have to be like pulling teeth. You just need to know what to look for and what questions to put forward.

Here are five tips for choosing the right credit counselor to help you get out of debt:

Ask the Right Questions

If the professional credit counselor can offer you clear and concise answers then you know that you have found the right organization for your ultimate objectives of becoming debt-free.

In order to make this conclusion, you need to ask the right questions. Everything from how you can reach your goal of being debt-free in two years to what they will do to help you accomplish this aim, there are numerous questions that you can ask to help you make the right choice of service.

Determine Their Reputation

Reputation is key because referrals, accreditation and past experience will ensure that your case will be properly managed for the next little while. You can find out what exactly their reputation is by seeking out Better Business Bureau (BBB) and provincial or national credit association accreditation or to discover if they are in good standing. Your credit needs aren't a joke.

Moreover, if you visit the typical review websites you can find out what past clients have to say about the credit counseling organization or certain individuals stationed at the firm.

Fees, Contract & Fine Print

Before entering into a contract, you must first understand what the fees are and how much you will have to pay the company. After the fees have been highlighted, you must thoroughly read through the contract between yourself and the organization. Remember, you have to carefully comb through the fine print as a way to protect yourself from unscrupulous methods.

Other Services They Provide

Aside from reining in your debt, credit counseling services offer a plethora of other services.

They provide their clients with one-on-one personal finance counseling, courses and seminars. These can be of tremendous help in order for you to manage your cash flow, use credit effectively and survive a sudden loss of income. These are all quite valuable services to take advantage of if you wish to become financially astute. If you would like to learn about the services, you may be interested in visiting the website for Credit Counselling Services of Atlantic Canada.

You Must Stay Vigilant

Finally, you must stay vigilant throughout the entire process from beginning to end, and the organization should certainly encourage this type of behaviour. The best way to stay vigilant is to keep track of your case, find out how much you have left to pay off and what kind of deals the credit counseling firm made with your creditors. These are all ways to remain vigilant.

Let's face it: many of us are bad with our finances. We know how to make money, but we don't know how to manage these same funds. We blow our money on iPhones, restaurants and clothes. When we spend more than we earn and when we make the wrong choice of living beyond our means, we get into pecuniary trouble and then have to resort to a credit counseling service.

But, hey, at least you can take comfort in the fact that you are taking the first step to getting your personal finances back on track, and this is what you should be applauded for.