We can’t open a newspaper, tune in a radio station or flip channels on the TV without seeing or hearing ads by “Debt Consultants”
But what exactly do they do?
The simplest answer is “not much” other than separate you from your hard earned money with false promises of “Freedom from Debt” Here is a video of Hoyes Michalos founders Doug Hoyes and Ted Michalos discussing “Debt Consultants”.
The Debt Consultant industry in Canada is not regulated, anyone can call themselves a “debt consultant” no qualifications are necessary. Some of these “Consultants” do take the step of becoming qualified to provide the mandated counselling required under the law for anyone who files a bankruptcy or a Consumer proposal through a licensed Trustee in Bankruptcy, but most only do so so they can advertise themselves as “Government Approved”. Most never intend to provide any such services.
Quite a number of these “consultants” serve as representatives for American “debt Settlement” companies that have sprung up like mushrooms after rain. These American outfits generally are not licensed to operate in Canada, don’t know our laws and regulations and really could care less as long as you sign up to their “Debt Settlement” plans. These plans often have high fees and very low success rates, I’ve met people who have used these services, paid thousands in fees and still ended up with their pay garnished by people they thought they had protection from.
The fact is that many of these “consultants” really only want to take advantage of people who are desperate and fearful of seeking the help of a Trustee in Bankruptcy. Many Debt Consultants end up referring people to Trustees after charging them a fee or milking them for as much money as they can.
So how do you protect yourself?
Simple, make sure you see a Trustee first. Trustees in bankruptcy are required to review your situation with a view of avoiding a bankruptcy. There are options other than bankruptcy for dealing with debt and a Trustee will make sure that if you don’t need to file a bankruptcy you will get the help you need to solve your debt problems. Today more than half the people I see never file a bankruptcy, most are able to arrange a solution to reduce their debt to a manageable size and make one affordable payment monthly to resolve their debt problems through a ConsumerProposal.
So don’t be fooled by predatory “debt consultants” they don’t work for you, they work for themselves and could care less if you ever get debt free as long as you pay their fees.
A licensed Trustee in Bankruptcy is required by law to be fair and impartial and to not act in self interest. And the fees that a Trustee charges are set by Law.
If you have too much debt and need help dealing with it call 310-PLAN ( 7526) or send me an e-mail (use the form on the right hand side of every page on this site) or click on www.hoyes.com and lets get started
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