There is a distinct difference bankruptcy and proposal. You will pay more in a proposal as you opposed to bankruptcy. Your credit will be ruined and with both you would need to re-establish your credit once you discharged from bankruptcy or have completed your proposal.

There is a distinct difference between debt settlement loan and debt management plan. With debt settlement you are paying a percentage (30-65%) on your outstanding debt in a lump sum as full settlement on the outstanding debt while with debt management plan you will pay 100% of your outstanding debt and your interest rates will be reduced or eliminated. Debt consolidation loan may improve your credit rating, while your debt management plan will affect your credit rating negatively.

There is a sharp difference between debt consolidation loan and debt management plan. With debt consolidation loan you will be paying one low payment and continue to pay interest on your outstanding debt while with debt management plan your interest rates will be reduced or eliminated and you will pay 100 per cent of your outstanding debt. Debt consolidation loan may improve your credit rating, while your debt management plan will affect your credit rating negatively.

The cost is 100% of the outstanding debt. The only relieve you will get is to reduce or eliminate the interest rates that you were paying before enrolling in the debt management program.

Cash flow will be tight while in debt management program. You will be paying 100% of your outstanding debt. Over 50% of those who enroll in these debt management plans will drop off and end up filing for bankruptcy.

Yes and No. Debt management can be one of the alternative ways that can help get out of debt. It depends on your current financial situation. With debt management plan you end paying 100% of the outstanding debt as opposed to debt settlement or consumer proposal.

Yes, you can re-establish your credit after having successfully completed your debt management plan. One known way is take a secured credit card, or try to lease a car. Within 18 to 24 months your credit will recover assuming you did not default on your debt again.

Yes, your credit will be ruined. The effect is not as severe as it could if you had file for bankruptcy.

Creditors will report to the credit bureaus that you are in credit counseling. This demonstrates an inability to take care of your financial affairs which adversely affects your credit worthiness for a minimum of seven years. Your credit score will maintain R7 (Account is consumer proposal or credit counseling) up to five years depending on the duration of the debt management plan. Then change to an R3 (Account is more than 60 days but no more than 90 days, payment is past due) for another two years after the last payment is made. Credit Counseling impacts your credit negatively.

The result, you will end up paying all outstanding debts without interest for a maximum of five years.

Credit counseling offers an end to your creditors’ harassment or legal action. Follow their direction and you will learn new money management tools and skills that will serve you well throughout life.