Bankruptcy Counselling Changes
The Office of the Superintendent of Bankruptcy is contemplating sweeping changes to the Counselling Directive, which if implemented will dramatically affect the spin off industry.
The mandatory counselling protocol has been in place since about 1997. It required that counsellors be certified after completing a brief training component. Not profit agencies had their staff certified to conduct the sessions both to generate funds for the agencies and to provide a service to Licensed Insolvency Trustees.
The idea of the counselling is to provide insolvent individuals, who have filed for bankruptcy or a proposal, with information and skills to assist them in avoiding some of the pitfalls associated with poor money management and a general lack of sophistication in the use of credit.
Proposed stricter new rules will require that only Licensed Insolvency Trustees or their staff be permitted to conduct the sessions. The bottom line of credit counselling agencies will be negatively impacted and more work will be created for trustees who have previously outsourced the services. On a positive note the changes will break the relationships between some agencies and trustees who have developed exclusive relationships.