Credit Counsellor and Bankruptcy Trustees – What do they do and how can they help with debt?
If you are finding yourself struggling with your finances, chances are you have looked into what options are out there for you and who you can ask in regards to help with your debt. You may have come across the words bankruptcy trustee and credit counsellor in your findings and wonder what each of them do to help a person struggling with debt. Today I would like to help you understand the differences between a bankruptcy trustee and a credit counsellor and also give you an idea of what they do in relation to helping people with their debt.
A Bankruptcy Trustee is a person who is licensed by the Office of the Superintendent of Bankruptcy to administer bankruptcies and proposals under the Bankruptcy and Insolvency Act in Canada. They will meet with a client for a consultation, present the client’s options to them and if the client decides to proceed, the trustee will begin the paperwork. The Trustee will administer the bankruptcy and proposal process from start to finish. During this process the Trustee may sell off a debtor’s available assets and hold the proceeds until the time comes to pay it to the creditors.
A Bankruptcy Trustee’s fee is set by a government tariff and based on the amount of money the Trustee is able to retrieve from the debtor (the person filing for bankruptcy or a proposal) to give to the creditors. A Bankruptcy Trustee has a fiduciary duty to the creditors and can not act as an advocate for a debtor to obtain the best possible settlement.. The more money the creditor gets, the higher the bankruptcy trustees fees will be.
A credit counsellor will take a look at your financial situation and help you figure out a plan in order to pay off your debt. The most common form of debt help they offer is a debt management program which is when the client signs a contract with the agency agreeing to pay so much money a month to the credit counsellor any they pay the creditors.. The creditors may be able to reduce the interest on the debt but they don’t reduce the principle owed.. Then the Credit Counsellor will disperse the money you have paid them among the creditors according to the plan that was created.
A Credit Counsellor will charge a fee for their services and nonprofit credit counsels receives funding from the creditors. A person needs to be diligent in their research when considering using a for profit Credit Counsellor, as there are many disreputable people out there making promises that they simply do not keep. If Credit Counseling is the way you choose to go, make sure that the company you use has a good reputation and is in good standing with the BBB. But always look at all options as the vast majority of consumers would be significantly better off filing a consumer proposal than entering a credit counselling program.
4 Pillars consultants offer a variety of services specific to people in debt. We have helped thousands of families and individuals reduce their debt by up to 80%. 97% of families successfully complete the plans that we create and become debt free. We outline the options available and walk you through the entire process so you feel cared for and secure. 4 Pillars is different because we work directly for you the client, keeping your best interest in mind at all times. Our fees are not based upon how much money you end up paying back to your creditors. We create plans that you can afford so that you can continue living life and can get on with your life. If you would like to know more about how we can help you, give 4 Pillars Lethbridge a call at 403-332-7361.