{"id":1604,"date":"2015-06-30T21:00:35","date_gmt":"2015-07-01T01:00:35","guid":{"rendered":"http:\/\/www.irasmithinc.com\/blog\/?p=1604"},"modified":"2021-05-28T14:47:01","modified_gmt":"2021-05-28T18:47:01","slug":"how-advantages-of-consumer-proposals-saves-you-from-debt-settlement-companies","status":"publish","type":"post","link":"https:\/\/irasmithinc.com\/blog\/how-advantages-of-consumer-proposals-saves-you-from-debt-settlement-companies\/","title":{"rendered":"HOW ADVANTAGES OF CONSUMER PROPOSALS SAVES YOU FROM DEBT SETTLEMENT COMPANIES"},"content":{"rendered":"<figure id=\"attachment_1615\" aria-describedby=\"caption-attachment-1615\" style=\"width: 300px\" class=\"wp-caption alignright\"><a href=\"http:\/\/www.irasmithinc.com\/blog\/wp-content\/uploads\/2015\/06\/ADVANTAGES-OF-CONSUMER-PROPOSALS.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-1615\" src=\"http:\/\/www.irasmithinc.com\/blog\/wp-content\/uploads\/2015\/06\/ADVANTAGES-OF-CONSUMER-PROPOSALS-300x300.jpg\" alt=\"advantages of consumer proposals, bankruptcy trustees, collection agency, Collection Agencies Act, consumer proposals, credit counselling, debt, debt settlement companies, debt settlement services, Ontario Collection and Debt Settlement Services Act, starting over starting now, trustee, trustee in bankruptcy\" width=\"300\" height=\"300\" title=\"\" srcset=\"https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2015\/06\/ADVANTAGES-OF-CONSUMER-PROPOSALS-300x300.jpg 300w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2015\/06\/ADVANTAGES-OF-CONSUMER-PROPOSALS-150x150.jpg 150w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2015\/06\/ADVANTAGES-OF-CONSUMER-PROPOSALS-1024x1024.jpg 1024w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2015\/06\/ADVANTAGES-OF-CONSUMER-PROPOSALS-1200x1200-cropped.jpg 1200w, https:\/\/irasmithinc.com\/blog\/wp-content\/uploads\/2015\/06\/ADVANTAGES-OF-CONSUMER-PROPOSALS.jpg 1767w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-1615\" class=\"wp-caption-text\">HAPPY CANADA DAY!<\/figcaption><\/figure>\n<p>The advantages of consumer proposals with a Trustee can save you from debt settlement companies.\u00a0 Here\u2019s how.\u00a0<!--more-->Unlike a trustee in bankruptcy, debt settlement<br \/>\ncompanies have long been a hot button issue and as a result we\u2019ve posted several blogs on the subject:<\/p>\n<ul>\n<li><a href=\"http:\/\/www.irasmithinc.com\/blog\/beware-of-debt-settlement-companies-read-this-blog-to-find-out-why\/\">Beware of Debt Settlement Companies<\/a><\/li>\n<li><a href=\"http:\/\/www.irasmithinc.com\/blog\/the-latest-on-debt-settlement-companies\/\">The Latest on Debt Settlement Companies<\/a><\/li>\n<li><a href=\"http:\/\/www.irasmithinc.com\/blog\/debt-settlement-companies-finally-taken-to-task-in-ontario\/\">Debt Settlement Companies Finally Take to Task in Ontario<\/a><\/li>\n<\/ul>\n<p>The advantages of consumer proposals are in the news again\u00a0because as of today, July 1, 2015, the Ontario government has changed the law regulating debt settlement services in Ontario under the Ontario <em><a href=\"https:\/\/www.canlii.org\/en\/on\/laws\/stat\/rso-1990-c-c14\/latest\/rso-1990-c-c14.html\" target=\"_blank\" rel=\"noopener\">Collection and Debt Settlement Services Act, R.S.O. 1990, CHAPTER C.14 and its Regulations<\/a><\/em> (the \u201cAct\u201d)<em>, <\/em>which replaces the<em> Collection Agencies Act<\/em>. There have been laws in place regulating debt settlement companies, but they haven\u2019t been enforced very well.<\/p>\n<p>According to Nima Taheri, CEO, Markham, Ontario-based Compliance First Financial, \u201cToday, more than fifty percent of the firms offering debt settlement services to Ontario residents do not satisfy Ontario\u2019s licensing requirements, and, therefore, are operating illegally in Ontario as an unlicensed \u201c<a href=\"http:\/\/www.irasmithinc.com\/blog\/debt-collectors-calling-collection-agency-after-you\/\">collection agency<\/a>\u201d, and in some cases the Ontario Government is aware of the existence of these firms and for whatever reason, no action of any consequence has been taken against these firms.\u201d<\/p>\n<p><em>Effective today under the Act:<\/em><\/p>\n<ul>\n<li>Companies providing <a href=\"http:\/\/www.irasmithinc.com\/blog\/debt-management-in-ontario\/\"><em>debt settlement services in Ontario<\/em><\/a> must be licensed under the <em>Act<\/em><em>,<\/em> with a few exceptions:\n<ul>\n<li><strong>Not-for-profit<\/strong> <a href=\"http:\/\/www.irasmithinc.com\/bankruptcy_services-personal_credit_counselling.html\">credit counselling<\/a> agencies acting as charitable foundations (as defined by the Canada <em>Income Tax Act<\/em>);<\/li>\n<li><strong><a href=\"http:\/\/www.irasmithinc.com\/bankruptcy_services-personal_why-use-a-trustee.html\">Bankruptcy trustees<\/a><\/strong> (who are already licensed by the federal government); and<\/li>\n<li><strong>Lawyers<\/strong> are excluded from these licensing requirements.<\/li>\n<\/ul>\n<\/li>\n<li>Fees are capped to a maximum amount of 15% of payments or 10% for a lump sum plus a $50 set-up charge.<\/li>\n<li>Fees cannot be charged until payments have been made to the creditor(s).<\/li>\n<li>Up-front fees are prohibited.<\/li>\n<li>Any firm licensed as a collection agency in Ontario (a requirement for both collection agencies and debt settlement service providers) will be legally entitled to provide both collection agency services <em>and<\/em> debt settlement services which in my view is a huge conflict of interest.<\/li>\n<\/ul>\n<p>Even with this new Act, the advantages of <a href=\"http:\/\/www.irasmithinc.com\/bankruptcy_services-personal_consumer-proposal.html\">consumer proposals<\/a> outweigh going to debt settlement companies.\u00a0 Will debt settlement companies really provide a valuable service to consumers or continue to prey on them? According to the Canadian Bankers Association only 10% of offers received from debt settlement companies are accepted and it&#8217;s estimated that only 3% are successfully completed.<\/p>\n<p>This is hardly surprising since debt settlement companies are not qualified to provide advice on dealing with debt. They have no training or education requirements and they are not and should not be considered financial services professionals.\u00a0 Starting July 1, the person calling you up from the collection agency to hound you on behalf of one of their clients who you owe money to, will have a new script.\u00a0 When you tell them that you cannot afford to pay, they will then ask you for information on all your debts, and then try to sell you the services offered by debt settlement companies.<\/p>\n<p>This will be a huge conflict of interest.\u00a0 If they can\u2019t collect the money for one client, they will try to sell you services to attempt to deal with all of your debts.\u00a0 But they still lack the specific training to properly counsel you. \u00a0They still will not be able to meet or exceed the advantages of consumer proposals. \u00a0Rather, they will be figuring out how to counsel you to pay money that you probably can\u2019t afford, because their commission revenue goes up the more they can get you to pay!\u00a0 Hence, the conflict of interest.<\/p>\n<p>One of the advantages of consumer proposals is that bankruptcy trustees are financial services professionals who had to successfully complete rigorous education requirements and pass an RCMP background check in order to be federally regulated and licensed.\u00a0 \u00a0A trustee in bankruptcy is also subject to a strict code of ethics. Trustees\u2019 fees are regulated by the Federal Government and the Court and are usually much less than the debt settlement companies who make unsubstantiated claims.<\/p>\n<p>Another one of the advantages of consumer proposals is a high probability of success.\u00a0 <a href=\"http:\/\/www.irasmithinc.com\/blog\/consumer-proposal-great-alternative-bankruptcy\/\">Consumer proposals<\/a> filed by a trustee have an excellent chance of being accepted by creditors. The consumer proposals our office files have experience virtually 100% acceptance by creditors.\u00a0 We know of other trustees who say their success rate with consumer proposals is in the high 90% range.<\/p>\n<p>The reason for the advantages of consumer proposals is because a licensed trustee understands the behaviour of your creditors, is obligated to review all options with you and explain why a consumer proposal is a better option than other ones available, including <a href=\"http:\/\/www.irasmithinc.com\/bankruptcy_services-personal_personal-bankruptcy.html\">personal bankruptcy<\/a>.\u00a0 A trustee can advise you properly on how to reach a mutually satisfactory compromise on your debt that you can actually complete successfully, taking your family income and situation into consideration.<\/p>\n<p>The advantages of <a href=\"http:\/\/www.irasmithinc.com\/blog\/consumer-proposal-ontario\/\">consumer proposals<\/a> with a trustee versus debt settlement companies are simple; a trained, educated, licensed financial services professional delivers results.<\/p>\n<p><a href=\"http:\/\/www.irasmithinc.com\/contact_us.html\">Contact<\/a> <a href=\"http:\/\/www.irasmithinc.com\/index.html\">Ira Smith Trustee &amp; Receiver Inc.<\/a> for sound, professional advice and a solid financial plan for <a href=\"http:\/\/www.irasmithinc.com\/index.html\">Starting Over, Starting Now<\/a>. \u00a0Happy Canada Day holiday to all of you.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The advantages of consumer proposals with a Trustee can save you from debt settlement companies.\u00a0 Here\u2019s how.\u00a0<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[670,5,60,671,155,6,24,25,2,120,168,672,33,133,11,131],"class_list":["post-1604","post","type-post","status-publish","format-standard","hentry","category-brandon-blog-post","tag-advantages-of-consumer-proposals","tag-bankruptcy","tag-bankruptcy-trustees","tag-collection-agencies-act","tag-collection-agency","tag-consumer-proposal","tag-consumer-proposals","tag-credit-counselling","tag-debt","tag-debt-settlement-companies","tag-debt-settlement-services","tag-ontario-collection-and-debt-settlement-services-act","tag-personal-bankruptcy","tag-starting-over-starting-now","tag-trustee","tag-trustee-in-bankruptcy"],"_links":{"self":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts\/1604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/comments?post=1604"}],"version-history":[{"count":5,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts\/1604\/revisions"}],"predecessor-version":[{"id":10806,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts\/1604\/revisions\/10806"}],"wp:attachment":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/media?parent=1604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/categories?post=1604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/tags?post=1604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}