Working With a Debt Consultant to Solve Debt Problems
It’s easy for debts to get out of control and if you find yourself in a difficult position, you may consider hiring a debt consultant.
They promise to help you manage your finances and find a way out of debt by negotiating with creditors and finding ways to reduce the burden of debt, while also implementing strategies to increase the amount that you can pay back each month.
But can debt consultants solve your debt problems?
In many cases, the answer is no and the problem is, anybody can call themselves a debt consultant and charge for their services, but that doesn’t necessarily mean that they will improve your financial situation.
You will often see adverts from debt consultants that make big promises, like reducing debt by up to 70%, and they always ensure you that they represent you and not your creditors, so they can help you to work out a plan.
Unfortunately, these ads are designed to target people that are already in financial difficulties and, in many cases, they cannot actually help you to get out of debt.
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If you respond to one of these ads and you contact one of these debt consultants, they may tell you that the best way to solve your debt issues is to file a consumer proposal, for example, and they can put you in touch with somebody that can help you to do that.
However, before they put you in touch with that person, you will need to pay their fee, which is hundreds, if not thousands of dollars.
The average fee for these kinds of debt consultants is around $1500 and if you are already in a lot of debt, you won’t have that kind of money lying around.
So, you spend months finding the money to pay their fees, and then they will put you in touch with somebody that can help you to file a consumer proposal.
In many cases, all of this happens over the phone and you never even meet the person that you are paying so much money to.
The thing is, these debt consultants are just middle men and you don’t need to pay them a fee before you can come to an organisation like ours, who can help you to file a consumer proposal.
One of the main issues with debt consultants is that they are not regulated by any official body.
They don’t need to obtain a university degree or register with any official financial body before they can call themselves a debt consultant.
Anybody can call themselves a debt consultant, even if they have no prior training and they don’t know how to deal with your debt issues.
That’s why it’s so important that you ask any debt consultant what their qualifications are and who regulates them.
In many cases, they are regulated by the collections agency because that is the only option.
You need to ask yourself whether you want to deal with somebody who is really a collections agent.
There are some great non-profit debt counsellors out there, and you will get a much better service from them than you would from the for-profit debt consultants.
The other big issue with debt consultants is that you have no legal protection at all.
If you were to file a consumer proposal with us, for example, you would have legal protection against being sued and nobody can garnishee your wages while the consumer proposal is being negotiated.
With a debt consultant, on the other hand, they may tell you to stop paying debts while they work something out with your creditors but there is nothing to stop your creditors from taking you to court during this period.
So, can debt consultants solve your debt problems?
In some cases, they may be able to, but they will do it in a very roundabout way that involves paying them a lot of money for no real reason.
But that’s a best case scenario and often, debt consultants are people that have little to no training or experience and are simply looking to exploit people that are in a difficult financial position.
Debt consultants simply put you in touch with people that can offer debt relief solutions and charge you a high fee for it.
But if you come directly to us, we can discuss your debt relief options with you and put a plan in place without charging you a ridiculous fee.
If you are concerned about debts and you want to learn more about your debt relief options, get in touch today.
You can reach us by phone or fill out an evaluation form and we will get back to you.
Information on Consumer Proposals
Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?
Canadian Bankruptcies
How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?
