What is mandatory credit counselling?
Credit counselling refers to the two counselling sessions, a person filing bankruptcy or a consumer proposal, is required to take before he can be discharged from bankruptcy.
Usually the counselling sessions are held at the trustee office.
The purpose of the counselling sessions is to provide financial information skills to the debtor in the hope that these skills will better prepare the debtor to make sound financial decisions.
The Office of the Superintendent of Bankruptcy has provided the following standards for trustees to follow:
First Counselling Stage — Consumer and Credit Education
The qualified counsellor shall present information to provide the bankrupt and/or relative, or a consumer debtor, with consumer advice in the areas of:
(i) money management;
(ii) spending and shopping habits;
(iii) warning signs of financial difficulties; and
(iv) obtaining and using credit.
Second Counselling Stage — Identification of Roadblocks to Solvency and Rehabilitation
The second stage is to determine the budgetary and/or non-budgetary causes of insolvency or bankruptcy and requires that the qualified counsellor:
(a) follow up on the application by the debtor of the principles presented in the first stage to assist the debtor, to better understand his or her strengths and weaknesses with regard to money management and budgeting skills;
(b) assist, where appropriate, the bankrupt and/or relative, or a consumer debtor:
(i) to identify the non-budgetary causes (such as gambling abuse, compulsive behaviour, substance abuse, employment and marital or family difficulties) that may have contributed to his or her financial difficulties;
(ii) to better understand his or her behaviour in financial management and consumption habits; and
(iii) to make him or her aware of the existence of resources that will help him or her achieve and maintain economic stability; and
(c) cooperatively with the debtor, develop recommendations and alternatives for a financial plan of action that, if appropriate, may include referral for specialized counselling to deal with non-budgetary causes of insolvency.

So does counselling succeed in its objective to better educate debtors so they can better manage with their finances? Some trustees think that counselling is very useful; or even essential.
Saul Schwartz: Counselling the Overindebted: A Comparative Perspective (2005) https://www.ic.gc.ca/eic/site/bsf-osb.nsf/vwapj/Schwartz-2005-ENG.pdf/$FILE/Schwartz-2005-ENG.pdf
Trustees as Noted by Saul Schwartz’s Study (above):
The trustee supports mandatory counselling despite believing, as do most trustees, that bankruptcy is not often an avoidable consequence of personal irresponsibility or ignorance.

Many trustees believe that their clients’ bankruptcies are unavoidable because they are caused by events such as unemployment, illness or family disruption.
I think that counselling is ineffective for the reasons I give in this article. https://www.bankruptcycanada.com/why-counselling-should-be-discontinued.htm

Debt counseling is the process where any one hands over all of your financial information to a qualified, experience and professional debt counsellor.

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Debt Counselling is a formal legal process that provides for a consumer to be declared over indebted and for the Debt Counsellor to negotiate a restructured payment plan and obtain a court order confirming the new repayment plan.

Getting into debt is an ugly and often unexpected experience. One day you’re coasting along, managing fine with your finances, and then one unexpected expense puts you over the edge. To avoid this problem, look at your spending patterns. If you see any signs that you’re walking a financial tightrope, consider tightening your belt a little.

If you find that you’re already over the brink, consider getting credit counselling services from experienced specialists: www.4pillarsvi.ca/

Set yourself up for Future Financial Success

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If you require hospitalisation, chances are you will have some queries about the cost and payment. Watch this clip to learn what you need to know about your hospitalisation bill during the financial counseling session.

Find out how the debt review process works and how it can help you to reach financial freedom!

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Debt. No one else sees it, but it’s always hanging around weighing you down.
Get debt off your back. The Credit Counselling Society is a non-profit service that’s helped thousands of Canadians solve their debt problems. Call them today at 1-888-527-8999. Their help is free, confidential, and it works.