Credit Counselling, Debt Counseling and Debt Advice

With credit counselling, debt counciling and all types of services that offer debt advice, it can be difficult to decipher who to talk to about debt relief solutions.

Credit counselling, and its most notable feature, the debt management plan or DMP, is one of several options when dealing with debt. If you’re one of the many Canadians feeling the burden of unmanageable debt, particularly nowadays if you are faced with financial uncertainty caused by COVID-19, it may be a solution to help you get back on track.


Credit counselling in Canada, sometimes also known as debt counseling, generally focuses on financial education and information, teaching people basic strategies like money management, budgeting tips, credit management and debt management strategies. The primary objective is to provide guidance and support on managing money and monies owed and to help the debtor avoid bankruptcy.

If you are struggling to keep up, unable to make minimal payments and the problem seems too big to handle on your own, talking to a certified consumer debt counselor for expert advice and to help point you in the right direction and find the solution that works best for your situation can be the first step to bring your finances under control.

When you decide to go for credit counselling, a certified credit counsellor or debt counselor will take a look at your current financial situation and evaluate the full scope of the financial burden.

The initial assessment with your counselor includes an analysis of your:

  • Income – How much money is coming in whether you have regular income, irregular or no income.
  • Assets – How much is the value of your home, car, RRSP/RESP, or any other investments and properties, and are these assets available to meet money owed.
  • Expenses – How much monthly cost is required for each basic necessity like housing, food and groceries, utility bills and transportation.
  • Liabilities -How much is your current credit card and other liabilities, plus interest rates, and minimum payments on each.

After a review of your budget and financial obligations, your credit counsellor will provide you with all the debt solutions available. Every solution has advantages and disadvantages and your debt counselor will help you determine what approach will work best for your unique financial situation. Depending on how complex your liabilities are, your credit counselor may simply offer money management tips, budgeting advice, and show you how to save money. If those tools are not enough, the counsellor may recommend putting you on a DMP.


A DMP is a debt repayment program exclusively offered by a credit counselling agency. It is an informal arrangement that you voluntarily make with your creditors to basically repay your debts in full, over a period of up to 7 years. The non-profit credit counselling agency consolidates all your unsecured debts together and credit counsellors or debt counselors will negotiate with your creditors on your behalf and propose a settlement based on how much you can afford to pay each month.

Enrolling in a DMP is ideal if you owe more than $10,000. A DMP is one of the few debt relief options that have been proven to work really well for extremely high levels of money owed. Many Canadians have successfully used DMP’s to consolidate debts upwards of $75,000 and even $100,000.

Most unsecured debts can be included in a DMP:

  • Credit cards
  • Lines of credit (LOC)
  • Unsecured personal loans
  • Past-due utility bills
  • Medical bills
  • In-store credit lines
  • Consolidation loans
  • Debts in collections

Secured debts that are attached to collateral, such as a mortgage, or a home equity loan, or home equity line of credit (HELOC), which are attached to your home, or an auto loan, which is attached to your vehicle, cannot be included in a DMP. Student loans also cannot be included in a DMP.

Once the DMP meets your needs and satisfies your creditors, you start to make one monthly payment, based on the terms of your repayment plan, to the credit counseling agency. The agency is responsible for distributing your payment to creditors included in the DMP.

The length of time it takes to become debt-free in a DMP is usually within 4 years, although some DMP’s may last for 5 to 7 years.


As with any debt relief program, there are advantages and disadvantages to repaying monies owed through credit counselling.

Advantages include:

  • A certified credit counsellor deals with your creditors on your behalf and works out a repayment plan that meets your needs and satisfies your creditors.
  • Multiple debts are consolidated into one monthly payment.
  • Although you pay back 100% of your debt, you pay it in smaller, more affordable amounts over a period of time.
  • When you are enrolled in a DMP, the credit counseling agency deals directly with your creditors. This means when you are getting collection calls, you can simply refer them to your credit counsellor.
  • Your counsellor may be able to negotiate with your creditors to lower or eliminate interest charges.
  • A DMP provides a clear and structured repayment plan with a fixed amount and a clear timeline for you to pay off your liabilities.

Disadvantages that should be considered:

  • You must be able to afford to repay the full amount of your debts plus fees to the credit counselling agency for the setup and monthly administration of your DMP, usually an additional 10% to 15% on top of your monthly payments.
  • Using a credit counselling service like a DMP will hurt your credit score. It will show as an R7 and it will remain on your credit report for 2-3 years. Once you have completed your DPM, you can immediately work at rebuilding your credit.


To make sure the program is the best solution for your needs, talk to us at Richard Killen & Associates for help and guidance. Send us an email now, or pick up the phone and call us at our toll-free line at 1-888-545-5365 and begin your journey to become debt free.

On your first consultation, we will provide you with free debt counseling to assess your situation and help you understand all your options for debt relief, including debt consolidation, credit counseling, debt management plans, consumer proposals and bankruptcies. We will aim to give the best debt advice about strategies that will work best to reduce and eliminate your debt so you can make the best choice for your unique financial situation.

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    Since 1992, Richard Killen & Associates, a Licensed Insolvency Trustee, have helped thousands of people resolve their financial problems. With 25 years experience in this industry, our president, Richard Killen, and the rest of our team understand the difficulties that honest people can sometimes find themselves in. This expertise makes it possible to provide you with a service that effectively deals with the issues.

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