What are the Fees for a Debt Management Program?

Dear Jeff,

What are your fees, if I enroll in your consolidated credit program?

Calgary, Alberta

Hi Phyllis,

It’s important to note, nonprofit credit counselling agencies are not here to profit off your hardship – they are here to help you make a plan to get out of debt. By law no debt relief company, including a credit counselling agency, is permitted to charge fees upfront before any service is provided. So the initial consultation to evaluate your debt and identify the right solution in your unique financial situation is free.

Fees only come into play after a client is formally enrolled in a debt management program. Fees are based on four basic factors:

  1. How much you owe
  2. How many credit cards you have
  3. Your income and budget
  4. Where you live

So the fees applied to a debt management program depend on how much debt is owed, how many credit cards that debt was accrued on and how much the enrollee can afford to pay. Provincial law can also play a part in how fees are calculated and set.

As you can see, fees are not determined by the agency you apply through – the fees you pay for a debt management program don’t vary by credit counselling agency because they’re set by other factors. So there’s little need to “shop around” for an agency based on getting the best deal. Instead it’s about finding a reputable agency that you can trust and feel comfortable to have negotiating on your behalf.

The last important thing to note about fees is you aren’t incurring another bill that has to be paid by enrolling in a debt management program. The fees are rolled into the program so they are included in the monthly payment you make each month to eliminate your debts. The total payment is generally 30-50 percent lower than what you would have been paying prior to joining a debt management program and that’s including the applied fees.

Jeffrey Schwartz
Executive Director

Jeffrey Schwartz is the Executive Director of Consolidated Credit Counseling Services of Canada and President of the Credit Association of Greater Toronto (CAGT).

If you have a question about a debt management program or just about finance in general, Jeff is here to help. Send us an email with your question to [email protected]. You’ll get the expert advice you need and your question may be featured here on our website.