How to become A Debt Counselor

• Debt Adviser
• Debt Management Consultant
• Credit Counsellor
• Money Coach
• Money Mentor
• Money Adviser
• Financial Adviser
• Accredited Financial Counsellor
• Insolvency Counsellor
• Chartered Insolvency & Restructuring Professional

What do Debt Counsellors do?

A Debt Counsellor would typically need to:

• Offer personalised financial advice on how to manage money and debts more effectively and responsibly
• Meet with debt-ridden clients and learn about their overall financial situation to set the groundwork for a structured monthly debt repayment plan
• Examine sources of income and expenditure; review the client’s debt records to identify creditors, terms and securities, and interest
• Offer advice about bankruptcy and court proceedings; confirm that the amount demanded by the creditors is accurate
• Guide the client in setting realistic monthly budgets; manage client expectations while overcoming client objections
• Explore alternate solutions to bankruptcy or foreclosure, such as consolidation loans, taking up a second or higher-paying job, or selling of expendable assets
• Help the client prioritise their debt load so higher interest loans are paid off more quickly than low interest loans
• Negotiate on behalf of the client with creditors and courts for implementation of affordable and reasonable repayment plans
• Keep the client posted on their changing debt situation; follow up relevant financial paperwork and late payments with the client
• Provide essential information and resources on personal and family finances, including budgeting habits and financial literacy skills
• Evaluate potential loans and welfare benefits and offer recommendations; review client credit reports to identify mistakes and inaccuracies, if any
• Facilitate implementation of plans to build or repair credit prior to applying for loans
• Ensure client confidentiality as per ethical and legal norms; offer emotional support, if the situation warrants it
• Support the client through the painful process of bankruptcy if their debts are too heavy to bring back under control

Debt Counsellors may work with their clients face-to-face, in an advice centre or office. They may visit outreach centres or the client’s home to extend assistance. 

Some deal with clients over the phone or through mail. Occasional court attendance is standard, and so is a certain amount of travel. You may work alone or as part of a team.

Regular office hours with some evenings and weekends thrown in to accommodate exceptional circumstances are part of a full-time Debt Counsellor’s work schedule. 

A few may work shifts, mainly if employed in an advice centre but have public holidays off. Part-time work, job sharing, and self-employment may enable more flexible work hours.

Finding a paid position might seem challenging, primarily if it relies on funding and includes a fixed-term contract for no more than two years. Debt Counsellors can boost their job search by asking their network for referrals, contacting companies directly, using job search platforms, going to job fairs, leveraging social media, and inquiring at staffing agencies. Part-time work, job sharing, and self-employment are viable options.

Debt Counsellors are generally employed by: 

• Not-for-Profit Credit Counselling Organisations
• Not-for-Profit Debt Management Firms
• For-Profit Credit Counselling Agencies
• Banks
• Credit Unions
• Loan Brokerages
• Citizen Advice Bureaus
• Trade Unions
• Universities & Colleges
• Depository Credit Intermediaries
• Real Estate Credit & Consumer Lending

Professional associations and organisations, such as The European Consumer Debt Network (ECDN), are crucial for Debt Counsellors interested in pursuing professional development or connecting with like-minded professionals in their industry or occupation. Membership in one or more adds value to your resume while bolstering your credentials and qualifications.

• Lack of adequate training and experience in debt review leading to ineffective debt counselling
• Non-compliance with set standards and lack of co-operation between debt counsellors and credit providers
• Occasional encounters with anxious or frustrated clients who are not fully aware of the consequences of debt counselling
• Complex debt situations that need innovative thinking and problem-solving skills
• Emotional burnout resulting from vicarious stress of clients who may have to deal with bankruptcy
• Sharp increase in the number of clients seeking debt counselling leading to backlogs

Related voluntary roles allow prospective Debt Counsellors to demonstrate relevant interpersonal skills, especially when working with vulnerable populations. 

Check with debt counselling charities and organisations in your area for volunteering opportunities. You may begin with offering general advice in a centre before receiving special training in money advice. 

In addition to understanding what it is like to work around counsellors and their clients, you will get an insight into the diverse behaviours, situations, and problems you may encounter when you begin practising.

Employers may give more weightage to relevant work experience in consumer advice, welfare rights, or debt recovery for a bank, council, or utility company than formal qualifications. 

Managing a budget for a community group or society may also serve the purpose, despite being a non-professional role. Experience using computers/working in an administrative capacity will help you easily handle desk-based duties.

Some locations offer an 18-month-long debt adviser intermediate apprenticeship that combines learning in the workplace with off-the-job study. 

You will gain optimal benefit from your tasks outside of the classroom when they line up perfectly with your lessons inside it. You may get to hear countless stories from more experienced professionals and obtain valuable hands-on experience when they manage to turn seemingly routine incidents into unique learning moments.

Read about the profession and interview or job shadow experts working in debt counselling to prove your commitment to course providers and prospective employers.

The requisite academic qualifications may vary across organisations. 

Based on their location and place of employment, aspirant Debt Counsellors may find a high school diploma will suffice to get an entry-level job. An accredited business, finance, and administration diploma is an equally viable option. 

In addition to knowledge about credit, debit, and loans, Debt Counsellors must excel at maths, understand personalities and emotions, and have excellent interpersonal and negotiation skills. A grasp of relevant consumer issues and community resources will be an added asset.

A bachelor’s degree in finance, accounting, economics, law, business management, social/community work, public administration, education, psychology, human ecology, social sciences, guidance, or counselling would prove most valuable.

Focus on enterprise and innovation, financial management, information processing, management and marketing, English, math, computer skills, and social studies in high school.

Remember that completing a particular academic course does not guarantee your entry into the profession. Be that as it may, your professional qualifications may open more than one door.

Do your homework and look into all available options for education and employment before enrolling in a specific programme. Reliable sources to help you make an educated decision include associations and employers in this field.

A combination of education, experience, and testing is generally required to gain certification, though requirements differ across regions. Successful certification programs protect public welfare by incorporating a Code of Ethics.

Certification in credit counselling from an objective and reputed organisation can help aspiring Debt Counsellors stand out in a competitive job market, teach them about essential concepts specific to credit, debit, and loans, and increase their chances of advancement.

Some locations mandate varying levels of certification in insolvency, bankruptcy and restructuring.

You will be working closely with people and confidential financial information. Potential employers may require an employment background check, including but not limited to a person’s work history, education, credit history, motor vehicle reports (MVRs), criminal record, medical history, use of social media, and drug screening.

Performance, experience, and the acquisition of professional qualifications drive career progression. 

Debt Counsellors who work for large organisations may advance to Manager or Director roles. They may move into related fields of welfare advice and guidance work or may be entrusted with training new hires in the intricacies of debt counselling.

It is possible to become a Credit Manager if working at a financial institution. If self-employed, you could take on more complex casework or specialise in niche areas.

Candidates with a relevant bachelor’s degree, an accredited credit counselling certification, and significant work experience in debt counselling have the best job prospects.

Continuing professional development (CPD) will help an active Debt Counsellor build personal skills and proficiency through work-based learning, a professional activity, 

formal education, or self-directed learning. CPD also enables the regular renewal of desirable certifications.

In general, corporate organisations train new hires to deal with difficult clients. Debt Counsellors employed by smaller organisations or self-employed develop effective skills through experience.

Consider completing specialist training courses to qualify for more complex casework or dedicate yourself to a specific niche area.

Ease Debt Burdens

Competent Debt Counsellors have a genuine interest in helping individuals struggling to repay their debts. Their positive attitude, active listening and negotiation skills, empathy and patience help put the client at ease.

Counsellors with good mathematical and computer skills, who can gather and analyse information, remain calm and objective under pressure, and respect client confidentiality stand a good chance of resolving the client’s financial issues.

Potential Pros & Cons of Freelancing vs Full-Time Employment

Freelancing Debt Counsellors have more flexible work schedules and locations. They own the business and can select their projects and clients. However, they experience inconsistent work and cash flow, which means more responsibility, effort and risk.

On the other hand, a full-time Debt Counsellor has company-sponsored health benefits, insurance, and retirement plans. They have job security with a fixed, reliable source of income and guidance from their bosses. Yet, they may experience boredom due to a lack of flexibility, ownership, and variety.

When deciding between freelancing or being a full-time employee, consider the pros and cons to see what works best for you.

Studies on the psychological cost of debt reveal that, on average, 83% of individuals without debt are satisfied with their life as opposed to 70% of those with debt.

Through encouraging individuals impacted by out-of-control debt or significant changes in employment or income to take the first toward a future of financial clarity and relief, qualified Debt Counsellors prove that ‘debt is real, but it isn’t forever.’

When money realises that it is in good hands, it wants to stay and multiply in those hands.”

Idowu Koyenikan, Wealth for All: Living a Life of Success at the Edge of Your Ability