Consumer Tips - Debt

Debt Warnings

If you frequently pay bills after their due date, regularly bounce cheques or receive calls from a collection agency you may be in over your head and now is the time to take action. Depending on your personal circumstances and the extent of your problem, several options are available to help you better manage your money and debt. For more complete information on the various options, visit Take Charge of Your Debts produced by Industry Canada's Office of Consumer Affairs at www.consumer.ic.gc.ca/debt.

The starting point: A budget

A budget is a tool that allows you to take control of your personal finances. It can help you make the best use of your income, plan for the future and most importantly, know exactly where and how your money is being spent. There are several ways to make a budget, some of them online. You may also download this paper version available at www.consumer.ic.gc.ca/debt and start today.

Budget / Credit Counselling

If you are struggling financially and feel that you need outside help, consider talking to a budget advisor or credit counsellor.

Anyone can use a budget/credit counselling service. They will help you establish a realistic plan for managing your money and offer suggestions to help you get out of debt.

• You can use a budget/credit counselling service even if you do not currently have any problems. They are there to help you with financial strategies to avoid trouble in the future.
• Most community and consumer organizations offer this service free of charge. While there may be fees attached to some services, you can find both low and no cost service options.
• Private organizations that provide this type of service may also charge a fee.

Before you decide to meet with a counsellor…

Make sure to ask questions with respect to fees. Is the first consultation free? What about the costs for any subsequent consultations? And if a debt consolidation or debt management plan is proposed to you, double-check before signing anything. What will be the total costs (they may be built into your overall monthly payment)? How much of your payments will go directly to reducing your debt? What is the length of the program that you are committing to, and what are the terms and conditions (for example, if you want to opt out)? Be wary of any counsellor that pressures you to sign up for such plans, without first taking the time to fully evaluate your situation and discuss options.

When choosing a budget/credit counsellor…

Take your time. There are people who appear to be offering their help but may end up taking advantage of your vulnerability. Call your consumer affairs office, the ministry that oversees consumer protection in your province / territory or the Better Business Bureau to see if any complaints have been filed against the person or company you are planning to deal with.

To find a budget/credit counsellor, and for more information on debt, visit Take Charge of Your Debts produced by Industry Canada's Office of Consumer Affairs. Information on finding a budget/credit counsellor is also available in the directory at the end of the Handbook.