Credit counselling and consumer proposals are 2 legitimate ways to help you get out of your debt trap with just some formalities and qualifications. Both have their eligibility features, which need to be approved before your application gets approved. If you know or have heard about these terms and want to acquire more knowledge in them, then keep scrolling and read precisely.
Credit counselling service
In this service, Debt Management Plan (DMP) is proposed. It is a strategy that needs to be qualified by the borrower. To be eligible for that plan, you need to be prepared to bear your debts within 5 years. The program is arranged via a non-profit counselor who agrees to assist you with your debts.
If you are considering going for the DMP plan in different Canadian regions like Alberta, Edmonton, etc., then you might get eligible for it if:
- You own enough money to pay your counselor’s commission and minor debts of $10,000 to $20,000 on their head.
- You can register for Consumer Proposal with enough worth you own at your residence but not able to obtain an approval application for Debt Consolidation Loan.
- You require some gaps to settle all your debts, but you can pay them off.
Advantages of Credit Counselling
- You can pay off 100 percent of your debts.
- Interest rate is relinquished or diminished
Disadvantages of Credit Counselling
- The payment of the counselor is 10 percent, and the sign-up fee ($50-100)
- You might not be able to find an appropriate counselor; credit actions also go on, and all this without any legitimate safeguard.
Consumer Proposal Service
It’s a government program to help the people pay off their debt amount by either settling with a small amount or lengthen the period to pay their debts. It is applied with the help of a Licensed Insolvency Trustee (LIT). If you are contemplating about this program in different regions of Canada such as Calgary or Lloydminster, then you need to look if you have these qualifications to pass:
- You can’t pay your debts.
- Eligible enough to pay a proportion of the debts as per the financial life.
- It consists of too much debt on their hands.
- Bankruptcy is not an option for them.
Advantages of Consumer Proposal
- The interest rate is nil.
- Payment of the LIT is included, and a lawful shield is given.
- Hold all the creditors together and break off wage garnishments.
Disadvantages of Consumer Proposal
- Your settling amount can be different as per your debt or 35 percent.
You are looking for a debt consolidation program that is an effortless way to fall prey to frauds. So, find a suitable and legal trustee or counselor to work on your debts. It’s better to wait for some time if you are not able to find one than to fall into another trap.
A trustee and a counselor both will look into your capabilities of paying off your debts and then will decide to approve your application or not. Although they are trying to help, they have certain obligations to look after strictly. Contact Credit720, the best credit counselling service providers for any help!