Debt Counselling and/or informal arrangements with your creditors generally calls for repayment in full of all debts, although with a reduced interest rate. When you meet with a Trustee regarding your financial problems, they will assess whether this option is the best solution for your individual situation.
Debt counselling sessions include information on personal budgeting to help you understand and control your finances to avoid future problems. The counsellor will require you to gather all your financial records, they will ask you questions about your debt, your income and your assets – in other words, your “net worth”.
This may be enough to help you see where you can cut expenses, so you have more money to devote to repaying your debts.
Counselling during bankruptcy
If you file for bankruptcy, the Trustee will arrange for counselling. These counselling sessions will help you with budgeting and to understand the causes of your bankruptcy, which may be non-budgetary, and look at possible solutions. You must take part in two counselling sessions, which in the case of remote areas is provided by telephone.