The difference between Credit Counselling, Debt Settlement Agencies and Doyle Salewski?
In the last 10 years new laws have been created to protect consumers from organizations seeking to profit under the premise of providing a debt-free future. You may have heard of “not-for-profit” credit counselling agencies and debt settlement companies. While these organizations may seem like they provide a solution to debt, many consumers do not understand the full implications of these options. After many complaints the laws are changing and governments have issued strong warnings to ensure consumers understand the associated risks.
Debt Settlement Companies
The Globe and Mail reported that the Ontario Association of Credit Counselling Services received at least 100 complaints a month related to twenty-two-debt settlement companies industry in 2013. The Ontario government responded by cracking down on debt settlement agreement rules, following the lead of Alberta, Manitoba, and Nova Scotia. Many consumers that worked with debt settlement companies experienced negative results further damaging their credit, paying hidden fees, or even a lawsuit as a result of a debt settlement, and were subsequently forced into bankruptcy.
Doyle Salewski has worked with many clients following a failed debt management agreement; after paying thousands of dollars, clients are sometimes shocked by the irrevocable consequences. With debt settlement companies there is no guarantee and you are not legally protected. Only a Licensed Insolvency Trustee (LIT) like Doyle Salewski has the ability to ensure legal action will be stopped by creditors.
Not-For-Profit Credit Counselling
Non-profit credit counselling agencies are actually debt collection agents and are required to be registered under the Collection and Debt Settlement Services Act in Ontario. They typically charge a percentage for their service and receive funding from banks, credit unions, and other financial institutions. Recently two large agencies have lost their status as registered charities, as CRA has determined they are indeed a for-profit business.
Not-for-profit credit counselling agencies are not required to inform you of all of your debt relief options.
Debt Management & Credit Counselling Versus Doyle Salewski
|Debt Management & Credit Counselling||Doyle Salewski|
|How much do you need to pay?||How much do you need to pay?|
|Usually the full amount of your debt, with lower interest and/or a longer term payment plan.||Depending on your circumstances you could pay percentage of what you owe with no interest.|
|What debt is included?||What debt is included?|
|Credit cards, unsecured lines of credit, unsecured loans.||All debts including tax debt. There are some exceptions such as some student loans, spousal/child support, court fines, fraud debt, and some secured loans.|
|Are you legally protected?||Are you legally protected?|
|No. The debt management plan is not a legally binding agreement for all creditors, meaning creditors can withdraw anytime.||Yes. Doyle Salewski is a Licensed Insolvency Trustee that has the Igeal authority to stop lawsuits, wage garnishment, and creditor calls.|
Doyle Salewski, Licensed Insolvency Trustee
The Financial Consumer Agency of Canada (FCAC) issued a warning to alert Canadians to how companies mislead consumers with promises of solutions to pay off debt or repair credit. If you’re considering working with a debt settlement organization or credit counselling company, the FCAC advises that you get advice from a LIT to understand your available options including a consumer proposal or bankruptcy. Only a LIT can provide access to these legal choices and provide unbiased advice for you to make the best decision for your future.
If you’re overwhelmed by your debt and unsure of your financial future, speaking to a LIT is the best way to understand the debt relief options available to you. If you are considering a debt management plan or have a current agreement you’d like a second opinion on, meet with an accredited debt management professional at Doyle Salewski for a free, no obligation consultation.
For more information on the risks of credit counselling and debt management plans, visit the Financial Consumer Agency of Canada.
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