Need debt help? Not sure what questions to ask about debt recovery?

Consider a credit counsellor or Licensed Insolvency Trustee.

There’s often a moment (or series of moments) when you realize you don’t just need budgeting tips. You need professional help to deal with your debt.

Perhaps up until this point, you’ve been trying to manage the situation on your own. Carefully allocating every dollar and juggling payments month to month. But if you’re no longer able to maintain minimum payments, are facing a financial emergency, or an increase in the cost of living is becoming unaffordable, it may be time to reach out for help.

So where do you turn for reliable debt recovery information?

Becky Western-Macfadyen of Credit Canada, recommends having a confidential conversation with an accredited credit counselor or regulated professional like a Licensed Insolvency Trustee. “That first conversation isn’t about committing to a solution, it’s about getting clear information and understanding your options.”

“For those that are feeling overwhelmed, they’re often feeling that urgency or that pressure to act quickly or fix everything all at once,” she explains, “when, in reality, you want that clarity piece first before you take any action.”

In scenarios where debt goes from being stressful to unmanageable, professional insight you can trust will help you find that clarity, without adding to your stress or pushing you to make an immediate decision.

How to find credible guidance in a crowded marketplace of options

Nonprofit credit counsellors. Debt relief companies. Licensed Insolvency Trustees. Government resources. Online forums. These are all options people encounter when they start looking for debt relief, but they don’t all serve the same purpose.

Western-Macfadyen recommends starting with organizations that are transparent about their oversight. For instance, “Licensed Insolvency Trustees are federally regulated and licensed by the Office of the Superintendent of Bankruptcy,” she notes. And they are the only professionals who can help you complete a regulated option like a consumer proposal or bankruptcy.

Meanwhile, “A nonprofit credit counselor will focus on things like education, budgeting and helping people understand and manage repayment options.” Any non-profit credit counseling agency should be accredited and open about their governance, adds Western-Macfadyen.

More broadly, she says: “Consumers should feel comfortable asking who regulates the organization, how staff are trained, and verifying information through government or professional association websites.”

And if you’re speaking to someone about debt recovery and they hesitate to answer those questions, that may be a signal to pause; Western-Macfadyen cautions.

She also highlights other red flags to watch for, such as:

• Someone pushing a sense of urgency and saying you must act immediately
• Guarantees that sound too good to be true
• Requests for payment or upfront fees before a clear decision has been made
• Not understanding your options before you decide on a path forward

Reaching out for help is the first step. The next step is asking the right questions. Western-Macfadyen suggests starting with the fundamentals:

• What are all of my available options?
• What are the pros and cons of each option?
• What will this cost me now and in the long term?
• How will this affect my credit?
• What happens if I decide not to move forward right now?

Any reputable professional should answer questions like these without pressure or judgment, she notes. They should also help you work through the complexities of your particular debt situation to develop a plan that works for you.

For instance, Elijah (a pseudonym used for privacy) had corporate debt he wanted to include in his consumer proposal. But the first debt relief company he spoke with told him it was not possible, even though he had signed a personal guarantee for the debt.

“When the company defaults, they come back to the personal, so they’re no longer corporate debts. They’re personal debts,” he says.

But the company he first consulted about a consumer proposal wouldn’t include the corporate debt, even with the personal liability he was facing. Nor did they explain why it couldn’t be part of the proposal. “It was just ‘‘nope,’” says Elijah.

“Whereas, Bromwich+Smith looked at it as ‘it’s debt and it’s hanging on your shoulders, so therefore it’s personal; what we need to do is figure out how we can get all of the debt that he has under that personal umbrella.’”

But they didn’t make any quick promises either, he explains. “The nice thing about it was they were flat-out, straight-up honest. They said ‘this is corporate debt, but I think we can pull it into the proposal, and we’ll send it off to the judge and get the creditors to sign off on it. And if they don’t, I might be giving you a call back, and we’ll have to go through and do this again.’”

For Elijah, that honesty made the difference. He wasn’t looking for guarantees. He was looking for someone who understood the ins and outs of regulated options, explained the reasoning behind their recommendations, and treated his situation with care.

That shift, from being shut down by the previous company to feeling heard by a Licensed Insolvency Trustee at Bromwich+Smith, gave him the confidence to move forward with a consumer proposal that fits his life and circumstances.

Because the right conversation with the right person won’t feel like pressure. It will help you understand your options and take the first steps toward recovery.