What does a Debt Counsellor do?

Published by The National Debt Review Center on April 21, 2024April 21, 2024

A Debt Counsellor, also known as a credit counsellor, is a professional who plays a crucial role in assisting individuals in managing their debts and improving their financial situation. They provide a range of services that are designed to help individuals regain control over their finances and work towards a debt-free future.

Debt Counsellors provide personal and confidential money management advice tailored to the individual’s unique financial situation. They help individuals understand their financial position, identify areas where they can cut back, and create a budget that allows them to repay their debts while still meeting their essential living expenses.
They offer guidance on how to improve or repair your credit score. This includes explaining how credit scores are calculated, what factors can negatively impact a credit score, and what steps can be taken to improve it.
Debt Counsellors help over-indebted individuals regain control of their finances by restructuring their debt according to a legally approved plan. This involves negotiating with creditors to lower interest rates, extend repayment terms, and sometimes even reduce the principal amount owed.
They negotiate with creditors on behalf of the debtor. This can involve requesting lower interest rates, waiving late fees, and arranging for more manageable repayment schedules.
Debt Counsellors develop personalized debt repayment plans based on the debtor’s income and living expenses. These plans are designed to help the debtor pay off their debts in a realistic and manageable way, without causing undue financial hardship.
Once a practical repayment plan for your debts has been created, your debt counsellor gets a court order to make it all official. This legal protection means that while this process is happening, you are protected from legal action by any of the organizations you owe money to. This allows you to focus on repaying your debts without the fear of legal repercussions.

It’s important to note that the role of a Debt Counsellor is not just about managing debt, but also about empowering individuals with the knowledge and tools they need to maintain a healthy financial future.