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DEBT RELIEF PROGRAM VS BANKRUPTCY: ARE DEBT RELIEF COMPANIES SCARY?

debt relief program

Debt Relief Program vs Bankruptcy: Introduction

We keep hearing commercials about debt relief and their scare tactics of portraying the safety of a debt relief program vs bankruptcy. But, what is debt relief? And can some of these so-called debt relief companies actually put you deeper into debt?

Debt Relief Program vs Bankruptcy: Are They Legit?

As consumer debt continues to soar many Canadians are easy marks for unscrupulous companies who make false claims which are quite frankly just scams. The Financial Consumer Agency of Canada (FCAC) is warning Canadians to be very cautious about companies that claim they can negotiate a deal to cut the amount of debt you must repay to your creditors. This process is often called “debt reduction,” “debt settlement,” “debt relief” or “debt negotiation.” The truth is that there is no easy way out of debt. And, if you need help dealing with debt problems, run away from these companies and work only with a licensed insolvency trustee (the new name for a trustee in bankruptcy).

Heed the warning of FCAC Commissioner Ursula Menke. “Unfortunately, people do not always see the benefits that debt reduction companies lead them to expect—and some people wind up even deeper in debt than they were before,” says FCAC Commissioner Ursula Menke. “If an offer to reduce your debts seems too good to be true, it probably is.”

Debt Relief Program vs Bankruptcy: Debt relief tactics to beware of:

  1. Government approved: Companies will try to win your confidence by stating that they are government approved. Not true. A company’s business license or registration doesn’t mean that the government has approved or endorsed them.
  2. We can reduce your debt by 60% or more: Not true. Your creditors are under no obligation to reduce your debts.
  3. High pressure sales tactics: Don’t ever be victimized by high pressure sales tactics. Always take your time. Do your due diligence. Check out the company thoroughly. Check with the government office that handles consumer affairs in your province or territory, as well as the Better Business Bureau.
  4. Upfront fees: These companies usually charge you hefty upfront fees and then don’t reduce your debt. Good luck getting a refund.

Debt Relief Program vs Bankruptcy: How Can You Get Debt Relief Safely And Reliably?

Contact a licensed insolvency trustee. We’re federally regulated, our fees are federally regulated, we’re subject to a strict code of ethics and we complete ongoing mandatory professional development each year.

A licensed insolvency trustee MUST first discuss all of your options with you in order for you to avoid bankruptcy, and attempt to find the best bankruptcy alternative solution for you. Many times the trustee can successfully carry out a debt restructuring proposal for you as an alternative to bankruptcy.

Don’t take chances with your financial future. Contact Ira Smith Trustee & Receiver Inc. We’ll evaluate your situation and help you to arrive at the best possible solution for your problems. Let us help restore you to financial health and give you back peace of mind Starting Over, Starting Now. Give us a call today. You’ll be happy you did.

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THE LATEST ON DEBT SETTLEMENT COMPANIES

debt settlement, debt settlement companies, debt reduction, debt relief, debt negotiation, bankruptcy, bankruptcy alternative, credit counselling, debt consolidation, consumer proposalBack in February we did a blog warning the public to Beware of Debt Settlement Companies. At the time the U.S. Federal Trade Commission had effectively shut down debt settlement companies, but no action had been taken in Canada. Although there have been numerous consumer alerts issued about debt settlement companies by the Financial Consumer Agency of Canada (FCAC), many people are still falling victim to them. Consumers are taken in by false claims offering to settle your debts for pennies on the dollar quickly and easily. The reality is that when something seems too good to be true, it usually is. Debt settlement companies exist for only one reason – to take your money! They will not help you solve your debt problems. There is no instant or quick fix for serious debt issues.

Finally this spring the Ontario Ministry of Consumer Services publicly declared it is moving ahead with tough legislative measures to protect consumers from these unscrupulous companies know as debt settlement companies, debt reduction companies, debt relief companies and debt negotiation companies. The Ontario Ministry of Consumer Services intends to introduce legislation that will:

  • Ban companies from charging upfront fees for debt settlement services
  • Limit the amount of fees consumers are charged
  • Require clear, easy-to-understand contracts
  • Establish a 10-day cooling-off period, providing consumers more time to consider their agreements
  • Allow the licenses of non-compliant debt settlement companies to be revoked

The best advice that we can offer is beware! There are currently 60 debt settlement companies operating in Ontario just waiting to take advantage of your situation.

If you are experiencing serious debt problems, there is help available. Contact Ira Smith Trustee & Receiver Inc. We are licensed by the Government of Canada and subject to a stringent code of ethics. As trustees in bankruptcy we will evaluate your situation and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal or bankruptcy. If ultimately consumer proposals or bankruptcy is the best option for you, you will have to use a trustee in bankruptcy. Contact us today and take your first step towards living a debt free life Starting Over, Starting Now.

Call a Trustee Now!