If a debt consultant makes wild promises, beware!

Most trustees in bankruptcy cringe when they hear debt consultants making wild promises on the radio. They are not always telling the whole truth. One trustee wrote several scathing blog posts on the subject including Debt Consultants: Some Horror Stories.

In Ontario thousands of people are paying money to debt consultants to solve their financial problems. These debt consultants have a simple message:

“We can settle your debts for 30 cents on the dollar. Pay us $500 (or whatever) per month, and after three years we will have accumulated the money we need to make a settlement with your creditors.”

That sounds great but credit card companies won’t wait three years to get paid. The telephone calls and collection agency harassment usually starts after only a few months. Within less than a year, a statement of claim is usually filed and these creditors will be successful in gaining a judgement against you.  Also, after a few months of non-payment a creditor like CRA is likely to start garnisheeing your wages, at which point the debt settlement plan collapses.

At Ross Taylor and Associates we are not debt consultants and we do not arrange debt management plans. We are credit and debt specialists who have been there and done that for pretty much any situation you may find yourself in. When we sit down to address your debt problems there are only three solution types we will entertain:

1) Design a repayment program for you which allows you to avoid bankruptcy, consumer proposal, or one of those unmentionable programs as described above.

2) Sometimes we may be able to negotiate a settlement directly with your creditors – if they are few in number, and if we can arrange an immediate lump sum payment – not one for three years hence.

3) Package and present your case to a respectable Trustee in Bankruptcy or Administrator of consumer proposals; we will represent your best interests, and negotiate a fair settlement of your debts.

If you realize that your debt consultant isn’t helping you, give us a call. If you have a lot of debt, don’t try to deal with it on your own.

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