The only two scenarios where credit counseling--as a "short-term fix"--can be justified

Some people might describe credit counseling as a shell game because it is the most expensive method for a consumer to eliminate their debt.

I am not a fan of credit counseling. It is simply the most expensive method for a Canadian to eliminate their debt. It costs a person doing credit counseling between $1.00 and $1.30 to eliminate one dollar of their existing debt. There are, however, two very limited circumstances where I do recommend credit counseling. These are actually "short-term fixes" where a consumer would sign up for credit counseling and then drop out as soon as a particular objective was reached.

Here are the two circumstances where I recommend credit counseling:

1. A consumer is stressed over collection calls and their income will rise dramatically in the near future

2. A consumer with outstanding student loans wants to resolve their outstanding indebtedness by way of either a consumer proposal or personal bankruptcy but they have yet to cease attending school for seven years

An individual whose income will rise dramatically in the near future

Some people may find themselves in a position that they are hounded by creditors and it is a major worry for them. If the income for these individuals is going to rise dramatically in the near future then they might want to consider enrolling in credit counseling.

This would result in a number of advantages. Firstly, the collection calls would stop. At least from the creditors who agree to participate in credit counseling. Secondly, your monthly payments would decrease. You would be paying your outstanding unsecured debt in 60 monthly instalments over a period of five years.

At some future date when your income rises dramatically then you might decide at some point to drop out of credit counseling and simply pay off your creditors outright.

A consumer with outstanding student loans--who has yet to cease attending school for seven years--who wants to either make a consumer proposal or file for personal bankruptcy

Some individuals with outstanding student loans who wish to do either a consumer proposal or file for personal bankruptcy may come up against the problem that their student loans will not be discharged or forgiven unless they have ceased attending school for at least seven years.

The short-term solution is to enroll in credit counseling and "run out the clock" on the seven-year-waiting period. Once the seven year waiting period has expired then you can drop out of credit counseling and either make a consumer proposal or file for personal bankruptcy. This tactic will enable the person to have their student loans discharged or forgiven.

In this short YouTube video former collection agency lawyer Mark Silverthorn describes the two narrow circumstances when a Canadian might want to use credit counseling for a limited period of time.

In this YouTube video titled "Is Credit Counseling For Suckers?" I highlight the fact that credit counseling is the most expensive debt relief option available to Canadians.

I hired a professional film crew and rented a film studio in Toronto to shoot this video. I feel so strongly about educating the Canadian public about credit counseling that I would spend more than I would on a week's vacation for my wife and I producing this video.

Former collection agency lawyer Mark Silverthorn is constantly amazed at the kid-glove treatment that credit counseling receives from the Canadian media.