Before you commit to a debt relief option or debt management program it’s important to understand the basics about debt help and solutions available in Canada. Read on to learn about where you can find advantages in professional debt services, as well as common pitfalls to be aware of.
Choosing a Debt Relief Professional – What to Know
Whether the debt solution you choose is formal or informal, there are different types of service providers offering assistance in how to deal with your debt, and you need to ensure you connect with a trustworthy expert. Here are some key tips to help you:
Licensed Insolvency Trustees are Canada’s Only Fully Regulated and Qualified Debt Help Professionals
Licensed Insolvency Trustees hold a unique designation and are the only professionals in Canada completely regulated, endorsed and authorized by the federal government to help people with formal debt solutions, and provide you with a complete range of debt options.
- Working with a local Licensed Insolvency Trustee in BC allows you to access debt relief solutions from debt experts the federal government has fully empowered and deemed qualified.
- One of the main services a Licensed Insolvency Trustee provides is in helping people understand their options for dealing with debt. Connecting with a Licensed Insolvency Trustee allows you to get impartial expert advice at no cost, so you can make informed decisions about how to move forward.
- If you decide to pursue a formal solution such as a Consumer Proposal or personal bankruptcy, a Licensed Insolvency Trustee would also work with you through the process.
It’s a given that consumers want financial advice and services from qualified professionals; unfortunately many aren’t aware that:
Credit Counsellors Aren’t Legally Required to Have ANY Special Training
‘Credit counsellor’ is not a professional designation; anyone can call themself a credit counsellor and offer a variety of services under this umbrella term. This might mean everything from free financial literacy resources to debt management plans with program fees.
- Many people who advertise their services as credit counsellors do hold an accreditation and have training from a national credit counselling organization, but consumers should understand these are self-regulated and do not have any official government oversight, approvals, or qualification standards.
- If you decide to work with anyone in this capacity, ask about and check into the organization or agent’s credentials; at minimum you should ensure they are part of an association in good standing.
Informal Debt Repayment Programs are Not Widely Regulated
Debt management arrangements such as credit counselling programs, debt settlement plans, debt reduction, debt pooling (and more) offered by agents, companies or organizations that are not Licensed Insolvency Trustees are considered ‘informal’ solutions. These do not fall under any national government-regulated industry and are not a legal process.
Essentially anything other than the legal debt options available through a Licensed Insolvency Trustee is left to provincial / territorial government responsibility. BC’s current laws leave many gaps that don’t provide adequate protection for consumers using informal debt management services.
- Organizations from out of province are able to easily target BC consumers, and many businesses will find ways to charge fees that get around the provincial licensing and guidelines in place, just to name a few common issues.
- Always review proposed contracts or agreements in detail, and don’t commit to anything if you feel pressured, uncomfortable or unsure.
- Be aware that fees charged can vary and ‘program’ costs and fees may add up quickly.
- Understand there is no such thing as a free debt management service, even declaring personal bankruptcy has a minimal administrative cost.
- Consumer Protection BC is tasked with licensing and inspecting complaints in a variety of sectors, including debt collection and debt repayment businesses.
- In BC anyone who charges a fee to negotiate with a creditor on your behalf needs to be licensed with Consumer Protection BC, including those operating as credit counsellors.
It’s not uncommon for Licensed Insolvency Trustees to work with people who were unfortunately unaware of the differences in options and representatives, finding themselves set back after pursuing an unsuccessful informal debt management strategy. Not only can this be a significant loss of time and money, but it can also feel incredibly discouraging.
Debt Relief Solutions – What to Know
Debt often feels like an impossible struggle, and it can seem overwhelming trying to determine what to do next. If this sounds familiar, know that you are not alone – and that debt is a problem like many others in that it does have solutions!
Canadian Consumers Have Two Different Legal Options for Debt Relief and Forgiveness
In Canada there are two different options that can allow you to formally deal with your debt and have some, or all, of your debt forgiven.
- Full debt forgiveness is possible by filing for personal bankruptcy.
- Consumer Proposals are a different solution that allow you to consolidate your debt into one (usually monthly) payment and cut the total down to what you can afford to repay.
- Your creditors will forgive and write-off the unpaid portion, which might range anywhere from up to 50-80% depending on your personal circumstances.
To access either of these debt relief options to manage and/or write-off your debt you will need to work with a Licensed Insolvency Trustee. In addition to dealing directly with creditors on your behalf, these options will also:
- Freeze your debts, including ongoing interest.
- Stop creditors from pursuing you for payments, even lifting wage garnishments and bank account holds.
- Give you a clear plan and peace of mind as to when and how your debt will be paid off for good.
Legal debt relief gives you the chance to have debts entirely forgiven, or consolidated and cut down to what you can afford to repay, and:
Virtually All Types of Debt Can Be Covered, Even Government Debts
From consumer and business debts like credit cards and lines of credit to income taxes, business GST, student loans and beyond, it is possible to manage and get forgiveness for basically all types of debt by doing a Consumer Proposal, or by declaring bankruptcy.
- You do not need to ask your creditors’ permission to file bankruptcy.
- Once accepted by the majority of your creditors (by dollar value), a Consumer Proposal will be legally binding on all your creditors.
Be aware that informal debt services are limited in the types of debts they can attempt to help you with. Government creditors and many others simply won’t get involved in voluntary agreements or plans proposed by debt repayment agents and credit counsellors.
- Informal debt relief services have no legal standing to compel creditor participation, and although most will refrain from taking any collection activities unless you miss payments, creditors can withdraw from informal plans any time.
- With informal debt management plans creditors are still free to pursue legal action against you.
There is No Such Thing as ‘Government-Sponsored’ Debt Programs or Grants
Some debt settlement agents and credit counsellors have been known to aggressively sell their services, making unrealistic promises and guarantees, and misrepresenting their abilities. Advertisements can be extremely misleading; be on guard before you ‘sign up’ and don’t be fooled by companies or agencies that claim they can:
- Help you access government-led, -run or -endorsed debt programs or grants.
- Beyond the two legal options (Consumer Proposals, bankruptcy), these simply don’t exist.
- You do not need to pay for any kind of referral to speak with a Licensed Insolvency Trustee, you can simply reach out on your own.
- Ask “Are you a Licensed Insolvency Trustee?”; it is illegal for companies to claim they can do a Consumer Proposal or bankruptcy for you if they don’t employ a Licensed Insolvency Trustee.
- Guarantee a reduced debt settlement or promise any type of loan or borrowing.
- Quickly repair your credit score.
Safe Debt Help and Free Advice
Despite all the information covered here, there is still more to know about consumer debt remedies and the unregulated debt management industry. Uncertainty about what to do about debt, where you can go for help, or even if your situation has a ‘better option’ can add layers of pressure to an already stressful situation. Please know that you are not alone and that you can:
Get Free Debt Advice by Connecting Directly with a Licensed Insolvency Trustee in your Province
The best place to safely get accurate debt advice is from a Licensed Insolvency Trustee – period.
Licensed Insolvency Trustees are the only debt management professionals formally qualified and overseen by the government. This offers consumers the security of knowing there is a mandatory adherence to the law and high standards of practice in all aspects of services and operations.
- Sands & Associates serves residents across BC and you can reach out directly to request a confidential consultation and get free one-on-one advice from a caring local representative.
- If you’re outside BC you can find a Licensed Insolvency Trustee in your province here.
- You absolutely do not need a referral to be connected with a Licensed Insolvency Trustee, and we would never recommend you pay for debt advice.
We’ll help you assess your situation, understand all your formal and informal options, and evaluate which might be suitable to meet your needs and goals. If you decide to move forward with a formal solution together, we will continue working with you throughout the process.
Everyone Deserve to Live with Dignity and without the Overwhelming Stress of Debt
Despite all efforts and intentions, people sometimes need a fresh start to move forward. Self-blame, embarrassment or shame about being unable to manage debt is common, but the reality is that genuine mistakes, or events outside our control do happen, making it difficult (if not impossible) to payoff debt. Your debt and the circumstances that caused it do not define you.
Many people are unsure about when they should consider getting professional debt help and if any of these things sound familiar:
- You think you might have a debt problem
- You’re experiencing any type of debt-stress
- You’ve been looking for ways to manage your debt more effectively
- You worry about escalating creditor action
– you ‘qualify’ to connect with a Licensed Insolvency Trustee to talk about your situation, debt-free goals, and get free impartial advice.
You don’t have to carry the endless worry or overwhelming stress of debt. A Licensed Insolvency Trustee can offer guidance and a personal debt-free plan so you can live your best life, debt-free.
Get started with a debt-free plan right’s right for you. Book your free confidential non-judgmental consultation with a caring local Sands & Associates expert today.