Can’t pay back bad debt? Is a licensed trustee or unlicensed credit counsellor a better option?

Pay back bad debt when it’s out of control

Debt management can be difficult. It can be difficult and worrying to be faced with a debt load that you are unable to handle and it can be tough to determine what you can do to get back in control.

 According to a recent poll, 34% of Canadians state that their current debt level causes them anxiety.

If you find yourself in a situation where you have a large amount of debt and you’re unable to make the payments needed to pay down that debt, you may need some help.

There are a number of options available to someone who needs help handling bad debt. Two of the most common options are a licensed trustee and a credit counsellor.

Which is the better option: a licensed trustee or an unlicensed credit counsellor?

A credit counsellor is a person who offers debt education and can negotiate with creditors as part of a debt management plan. Credit counsellors are not licensed by the Canadian government and each counsellor may have different knowledge or experience.

A licensed trustee is a person who is licensed to give a debtor advice and information regarding debt, consumer proposals and bankruptcy. A trustee is licensed by the federal government and can provide debt counselling, negotiate settlement agreements and help make a proposal to creditors. A trustee can also assist you with the consumer proposal and bankruptcy processes.

A licensed Trustee is the most skilled, experienced and legally knowledgeable resource a person can utilize in order to understand all the options that anyone with unmanageable debt must consider. These options are debt consolidation, credit counselling, bankruptcy and consumer proposal.

Reasons to use a Licensed Trustee

A licensed trustee can discuss each option available to you and help point you in the right direction. Working with a licensed trustee allows you to make an informed decision that will help you get in control of your debt.

Here are 5 reasons why you should use a licensed trustee:

  • A trustee is licensed and regulated by the Federal Government through the Office of the Superintendent of Bankruptcy. All trustees are Officers of the Court.
  • Trustees are required to remain impartial in all proceedings.
  • The fees that a trustee charges are regulated by the Canadian government.
  • Trustees are experienced and knowledgeable in all debt management options so you can be sure that you are well-informed of every option that is available to you.
  • A trustee is able to demand that creditors stop all collection actions against you.

If you have a debt load that has become unmanageable, working with a licensed trustee can allow you to discover an option that can help you. Each individual debt situation is different and working with an experienced and knowledgeable professional is the best way to ensure that you take the steps that are right for you and your unique situation.

The above article is for information purpose only. It has no relations what so ever with the services offered by Prudent Financial Services Inc.


Prudent reports all your Prudent loan payments to credit bureaus. But Prudent cannot “fix” or “repair” your credit. The credit bureau reports on the totality of your credit activities. The bureau updates regularly on your payments on credit cards, utilities, taxes as well as to banks, finance companies, credit unions etc. Prudent does try to educate its credit-challenged customers on wiser management of their financial affairs using information from responsible financial sources. E.g. Bankruptcy Canada and BDO.


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