These agencies offer advice to individuals who are struggling with debt through budgeting tools, education and the use of Debt Management Plans (DMPs).
Non-profit and for-profit credit counsellors who offer DMPs are licensed under the British Columbia Business Practices and Consumer Protection Act. The License gives the credit counsellor the ability to accept payment from you for distribution to more than one creditor.
DMPs work by having the agency contact your creditors and ask them to take payments over a specific period of time, and also to reduce or eliminate the interest on the debt. DMPs cannot be used for government debts such as income taxes or student loans.
Any time you are considering a DMP, whether it be through a non-profit agency or for-profit, make sure that the contract includes the following statement:
“Debt repayment agents operating in British Columbia are required to be licensed under the Business Practices and Consumer Protection Act and are regulated under that Act. The services of a debt repayment agent are not provided on behalf of, or in affiliation with, the Province of British Columbia or the Business Practices and Consumer Protection Authority, commonly known and doing business as Consumer Protection BC. Using the service of a debt repayment agent will not necessarily improve your credit rating, deter the efforts of a creditor to collect a debt or prevent legal action to recover the debt, including garnishment of your wages. For more information on the regulation of debt repayment agents, please contact Consumer Protection BC.”
You may check to see if a debt repayment agent license is valid here: https://www.consumerprotectionbc.ca/check-a-licence-search/.
The main difference between a non-profit credit counselling agency and a for-profit is the non-profit agency is supported and funded by your creditors which allows the agency to offer educational resources, community workshops, and online webinars to consumers at no cost to them. The for-profit agencies are funded by fees that you pay them through their DMP program.
Before using this service, do your research and determine who is going to give you the service and experience that you are looking for. If a DMP is a viable option for you, D. Thode & Associates Inc. can direct you to a reputable credit counsellor that can assist you in filing a debt management program and financial counselling.