Debts Can Make Strange Bedfellows – Know Who You Are Getting Into Bed With

Ian Martin

Ever heard of a debt consultant?  Referring to me, your quick answer might be a skeptical, “Aren’t you a debt consultant?  What’s the difference?”

For people struggling to pay their debts, it is a very confusing time.  The internet, radio and TV are covered with ads, everyone claiming to be able to help you.  How are you supposed to know who is legitimate and who is not? 

I met with Carl last week in my Kitchener-Waterloo office.  He told me about a debt consultant he found online that can help with “debt settlement.”  When he spoke to the operator, he discovered that he was speaking with a call centre based out of California. 

Scary?  There’s more.

Carl asked me about what “debt settlement” actually means.  I explained that this is the inexact science of paying some guy a lot of money to negotiate on your behalf so that your creditors will allow you to pay back less than the full amount. 

Carl thought that it sounded like a consumer proposal.  What’s the difference? 

First, a consumer proposal is a formal legal process that gives you protection from your creditors.  Even if one or more creditors disagree with your proposal, the overall acceptance is determined by the majority.  With an informal settlement, there is no protection.  Co-operation is entirely at your creditors’ discretion.

Second, we are not “some guy.”  A consumer proposal is administered by a trustee in bankruptcy.  A trustee gets his license from the federal government of CANADA.  Ask a debt consultant where he gets his authority from.

Third, your creditors won’t accept a settlement if you’ve been making your minimum payments.  What’s the answer?  The debt consultant told Carl to stop paying his bills.  That means, of course, that Carl will start to get even more calls from his creditors.  Does that sound like good advice?

Finally, a settlement normally requires a large up front payment of the consultant’s fee as well as the money to actually settle with the creditors.  That’s another reason why Carl was told to stop paying his bills.  He’s been living pay cheque to pay cheque.  How is he supposed to come up with the $5,000 that they had discussed? 

We’re different because you can talk to us for free.  A consumer proposal is a single monthly payment that fits in your budget.  Our fee is built into that payment, no extra cost. 

I don’t know you and you don’t know me.  Choosing how to deal with your debts is a big decision.   Do some research.  Talk to people.  When you are ready, please feel free to give me a call at 310-PLAN (310-7526 with no area code) so that we can get started on a real plan for your future.  You can also send me your questions by e-mail.