Know Who You’re Dealing With

Thunder Bay Debt Help and Bankruptcy

Consumer debt levels are on the rise.  According to Statistics Canada, Canadians now owe $1.64 for every dollar that they earn.  This means that more and more people are now looking for ways to get out of debt.

Unfortunately this has also led to the growth of “debt settlement” companies preying on people looking for debt solutions.  Recently there has been a flood of advertising from companies claiming to help you “avoid bankruptcy” and “get out of debt fast”.

However, many of these companies aren’t as helpful as they claim.  The Ministry of Consumer Services has received numerous complaints about them.  For instance, in one example given on the website of the Government of Ontario, a debt settlement company charged a consumer a fee and told the consumer that all of his creditors had been settled with.  In fact, however, one creditor had not accepted the deal and served the consumer with court papers.  When the consumer pointed this out to the debt settlement company, the company “cancelled” his settlement and kept their fee.  In other words, the consumer paid for a settlement that never existed.  Because the debt settlement company was unregulated (unlike Grant Thornton, a Thunder Bay Bankruptcy Trustee, who are licensed by the federal government as proposal administrators and as a trustee in bankruptcy) they could get away with things like that.

As a result of this and many other complaints, the Ontario government recently announced that they would be joining Alberta, Manitoba and Nova Scotia in restricting the activities of debt settlement companies.  Having met many people who have fallen victim to these companies, we applaud this move by the government and hope that it prevents people looking for debt help in Ontario from being taken advantage of.

Examples like this demonstrate why it is so important to know who you are dealing with.  Before entering into any sort of debt settlement arrangement with anyone, make sure that you have met with them in person at least once (or will be meeting with them), make sure that they have a physical office in Northwestern Ontario so you know that they are a legitimate business, and make sure that they are a reputable firm with experience helping consumers and companies with debt.  Above all, you should ensure that they are government-licensed trustees in bankruptcy and/or proposal administrators, just like we are.

For many people, the best legitimate alternative to bankruptcy is the consumer proposal.  With a consumer proposal, you can offer a settlement to your creditors that is legally binding and monitored by the federal government of Canada.  Once your creditors have agreed to accept your consumer proposal, they are obligated to honour the terms, as long as you do the same.  Give us a call today, toll-free at 310-8888, or email us at nwodebthelp@ca.gt.com to discuss if a consumer proposal is a possible debt solution for you.

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