Credit/Debt Counselling

By: Halton Family Services  09-12-2011

Halton Consumer Credit Counselling Service (HCCCS)
is a not-for-profit division of Halton Family Services.

Three programs are offered:

Counselling

Couples and individuals that are grappling with today's financial complexities approach the Agency for a private, confidential session regarding their money stresses. The counsellor is an impartial, experienced, trained professional who can help the couple (or individual) learn how to handle money better (budget counselling / system).

Counselling Third Party

This is a program that usually requires some "ongoing" counselling , plus some written advocacy with a third party.

Debt Management Program (DMP)

A "DMP" is a long term repayment program for the overwhelmed or seriously indebted. The program allows the client to pay his / her creditors, on a pro rata basis, over a specified term (usually 48 months). It is particularly suited for the client who wants to avoid bankruptcy, get their life back in order and repay their creditor obligations.

In a DMP, the client deposits sufficient funds monthly, with the Agency, to repay his creditors on a pro-rata arrangement. The Agency administrates, negotiates and disburses those funds until the debts are cleared and the client able to cope on his own.

The client also receives ongoing budgeting help, and is encouraged to continue on their own monitoring. Many clients shorten their DMP's considerably by developing their own strategies to repay their creditors faster and get their financial life back in control.

Counselling times can be arranged by appointment only
for Oakville, Burlington or Milton.


Credit is a financial and management tool to expand economic activity but it can cause problems if not controlled or understood. Credit is not a loan. It means committing future income to pay for present needs and wants. Credit is debt with contractual obligations.

The advantages to buying on credit are:

  • It is convenient
  • Usually 30 days free credit is offered on credit card transactions
  • Needs can be satisfied immediately
  • Can take advantage of a special bargain or sale when cash is not available
  • Monthly payments can be budgeted
  • Using credit can be a hedge against inflation as prices rise
  • A good credit rating makes it easier to get credit in emergencies

Some of the disadvantages are:

  • It encourages impulse spending
  • Comparison shopping is discouraged
  • Money tied up in instalment payments is not available for future needs
  • Credit costs increase the cost of goods purchased
  • If payments are not met, the item may be repossessed and money already paid is lost
  • A poor credit rating makes it harder to get credit
  • The consumer may agree to something he or she does not want because the contract is not understood
  • Credit buyers tend to buy higher priced merchandise because they are given a longer period of time to repay the debt

Ask yourself these questions before buying on Credit. Make credit decisions based on awareness of self control.

  • Do I need it now?
  • Is it worth the extra credit cost to have it now?
  • Is it worth the risk of losing the money I have put into it if I don't meet the payments?
  • Will this purchase help achieve a family or personal goal?
  • Is the interest cost reasonable?
  • Will I still be using the purchase when I have finished paying for it?
  • Will this purchase meet with family approval?
  • Am I buying it from a fair and honest person or firm?
  • Can I buy it without committing an anticipated increase in income?
  • Is my use of a credit card reasonable?
  • Do I usually make payments on time?
  • Have I been able to pay charge card statements in full and thus avoid finance charges?
  • Can I make these programs without skipping on necessities?
  • Do I have an emergency fund to take care of unforeseen expenses?
  • Is my credit good enough so that I can borrow incase of illness or emergency?
  • Is my income prospect good?
  • Have I avoided dipping into savings to meet regular expenses?
  • Do I avoid borrowing to pay off other credits or debts?
  • Am I always honest with spouse, self or others about my expenses?
  • Am I always current in rent or utility payments?
  • Are my assets greater than my debts?

One of the causes of consumer indebtedness is lack of control over credit purchasing. Credit creates the illusion that the buyer has money and often the purchase is put out of mind even before the bill is paid. The best and safest way to deal with consumer credit is to immediately put some money aside after buying the goods or services or, ideally, always make sure that the money is already saved before buying something. Such advice appears easy to follow, but in reality, the psychology of credit buying makes it a very difficult advice to follow.

Buying goods and services on credit without knowing exactly when it can be repaid or being concerned that you may have trouble meeting the minimum payments is risky business.


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