What to Expect From Credit Counselling

Seeing a Credit Counsellor? Here’s What You Should Know

When you’re burdened by debt, it’s hard to figure out your next move. That’s why so many Canadians turn to a licensed credit counsellor/Licensed Insolvency Trustee (LIT) to help them break free from debt. Credit counselling, provided by an LIT, is a valuable service that can improve your situation if you have overwhelming loans and debt, a damaged credit report, or are uncertain about your financial future.

Are you considering using an LIT credit counsellor’s services? Read below to learn about what to expect from your first appointment, how you might benefit, and what you should look out for when choosing a counsellor.

What is LIT Credit Counselling?

LIT credit counselling is a professional service, in which a credit counsellor reviews your personal situation, goals, and finances, and then works with you to develop and implement a plan and course of action to reduce debt, and improve your health and well-being. To develop a financial plan, anyone can choose to work with an LIT credit counsellor; however, the service is usually provided to individuals struggling with debt, those who are worried about their credit report, or those who wish to achieve financial control and independence.

LIT credit counselling is also mandatory if an individual files for bankruptcy, or files a consumer proposal.

READ MORE: How to Manage Your Debt Without Filing For Bankruptcy

Benefits of LIT Credit Counselling

Depending on your circumstances, an LIT credit counsellor may do one or more of the following:

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  • Discuss your present personal situation along with your goals and finances, and make recommendations to help you get control of your finances and debts.
  • If appropriate, develop and explain to you a detailed plan to give you immediate and long-term debt relief.
  • Communicate with your creditors and, if necessary, the court, to stop lawsuits and garnishments.
  • Over-see and manage your payments to your creditors to settle your debts.
  • Assist and coach you with daily and monthly budgeting and expense management.
  • Offer personalized advice to you to develop long-term savings and financial management skills.


It is important to note that an LIT credit counsellor, or any credit consultant for that matter, cannot change or eliminate your credit history. They can, however, give you a path, and the steps to take, to move forward, break free from your debt, and improve your credit report and credit rating. Speaking to, or meeting an LIT credit counsellor will not affect or harm your credit rating.

Instances Where Credit Counselling is Required

For most Canadians with debt, LIT credit counselling is an optional service you may seek out. However, if you file an assignment in bankruptcy or file a consumer proposal, it will be mandatory for you to participate in credit counselling. Read below to learn about these instances.


Bankruptcy is a legal process in which an individual, with the assistance of an LIT, formally state to their creditors that they cannot repay their outstanding debt. Upon completing the process, typically, all debts owed upon declaring bankruptcy are discharged. In some cases, certain debts do survive the process. To be able to complete the bankruptcy process, and have your debts discharged, it is required that you attend and complete two financial counselling sessions. The sessions are very similar to LIT credit counselling sessions, as described above.

Consumer Proposal

A consumer proposal is a debt settlement and re-payment process that permits you to settle your debts without having to go bankrupt. As with bankruptcy, the process is overseen and managed by an LIT, who you will choose and work with throughout the consumer proposal. A consumer proposal will, typically, significantly reduce the debt to be re-paid and extend the payments over many, but not more than, 5 years. Payments are made to the LIT who then makes payments to your creditors. Similar to bankruptcy, if a consumer proposal is filed, two financial and credit counselling sessions must be attended.

LIT credit counselling can be considered a step you may choose to take before filing for bankruptcy or filing a consumer proposal. An LIT credit counsellor will help you understand all of your options before deciding that bankruptcy, or a consumer proposal, is right for you.

READ MORE: Filing For Bankruptcy During The Pandemic

What to Expect At Your First Appointment

You may be confused or worried about what the credit counselling process entails. Don’t worry, a credit counsellor’s goal is to put you at ease and help you find the best solution, so you have nothing to worry about. Still, it’s not a bad idea to come prepared.

During your first session, your counsellor will want to collect as much information about you as possible to determine a course of action. They will ask you for a lot of information, which may include the following:

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  • Your age and relationship status
  • Dependent status
  • Your monthly household budget or a list of expenses
  • Your sources of income
  • If you have it, your credit report
  • Your debt information
  • Asset details
  • Your most recent tax return


It is important to be honest and up-front about these numbers. Remember, your goal is not to impress the counsellor, but to help them so they can help you.

The counsellor may have you participate in certain exercises, such as filling out a few forms or worksheets to help the counsellor prepare a summary of scenarios for your consideration.

What Will Happen During Your Remaining Sessions

If not done at the initial session, as the counsellor begins to better understand your circumstances, they will recommend a course of action, including the time frames, costs and benefits. They will also give you reading materials and “homework” to help you learn the techniques they have discussed.

The recommended course of action could be limited to meetings and exercises to improve budgeting, financial management, and savings strategies. In other cases, if appropriate, the LIT counsellor will recommend bankruptcy or the filing of a consumer proposal to resolve your debt challenges.

How to Find the Right Credit Counsellor

Do Your Research

It’s important to ensure that you choose a credit counsellor that you can trust.

In Canada, other than an LIT credit counsellor, credit counsellors do not have to obtain a license or meet a specific set of requirements, though individual agencies may set requirements for the staff they choose to hire. Additionally, several associations in Canada evaluate the standards of practice that these agencies have. You may choose to look up your counselling agency on one of the following databases:

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Look for a Licensed Insolvency Trustee

You may choose to retain the services of an LIT. In some respects, they are similar to unlicensed credit counsellors, but they are solely licensed to administer bankruptcies and consumer proposals. Substantial, unique, life-changing benefits can often be obtained by filing bankruptcy or filing a consumer proposal with the assistance of an LIT. LIT credit counsellors, and LITs, are very highly trained, tested at a national standard, insured and regulated by the federal government.

Avoid Counsellors Offering Bold Promises

Unfortunately, our laws do not prevent anyone from going into business and representing themselves to be a credit counsellor. We constantly hear of scam services that demand upfront fees (often very significant sums) that accomplish very little to nothing. Watch out for agencies or counsellors that:

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  • Claim they can revise your credit history
  • Entirely eliminate your debt
  • Charge significant up- front fees
  • Cannot provided a clear and transparent summary of their services and fee calculations
  • State (unlawfully) that they offer bankruptcy or consumer proposal services


READ MORE: Staying Debt-Free After Bankruptcy or a Consumer Proposal

If it feels like your debt is out of control, we, Baker Tilly Ottawa Ltd, Licensed Credit Counsellors and Insolvency Trustees, would be pleased to hear from you. We are a unique firm of debt management and debt elimination professionals. We employ highly trained, very experienced professionals. They are known for their knowledge, caring, compassion, and strong listening skills. We have many meeting locations in Ottawa and across eastern Ontario. We offer free initial consultations, and we do not demand upfront fees to begin to help you!