Credit Counseling and Alternative Solutions to Bankruptcy in Alberta

Posted by: Sandy Lyons on 08/01/2011

On occasion we get a client in the office ready to declare bankruptcy in Alberta and in our initial conversation we learn they went through a credit counseling debt management plan several years ago. It might surprise you to learn some Canadians who get in debt over their heads and manage to find a way to squirm out from under find themselves back in a debt hole again in a matter of a few years. Our federal bankruptcy law, the Bankruptcy and Insolvency Act of Canada (BIA) recognized this problem some time ago and included a requirement that all bankruptcy filers attend two formal credit counseling sessions while in bankruptcy in Alberta.

The first session teaches basic principles of money management and credit card use as well as practical techniques of personal financial management. The second session is where the real benefit of credit counselling is found – the opportunity to learn from past experience. You see, no one anywhere in Canada put a gun to your head and forced you to run up those balances on your credit cards and take on department store and other installment debt. You did that on your own, and if you do not make some changes, chances are you will do it again in the future. It is a sad fact that with the exception of personal bankruptcy in Alberta and consumer proposals, not a single other debt solution in Canada requires formal credit counseling.

Many Canadians who walk into a the office of a credit counseling agency for help walk out having enrolled in a debt management plan without hearing more than a few words about the need to examine their spending habits. We live in a culture that values material possessions. Many Canadians today define themselves not by who they are but by what they own. If material things define your success, the only way to remain successful is to keep buying, even when your income can no longer match your spending habits. One of the hardest things any human being can do is look in the mirror and admit their problems may be of their own making.

It is easy for Canadians to rationalize their debt levels, blaming their employers for low pay raises and the general economy for rising prices. If you are in deep financial difficulty in Alberta and looking for a non-bankruptcy solution, do yourself a favor and include formal credit counseling sessions in whatever debt solution you adopt.