Ontario Debt Rules

Understanding Ontario’s New Debt Rules

Ontario has recently joined the ranks of several other provinces in Canada in adopting new debt rules. These regulations are crafted with the primary aim of safeguarding consumers from the potentially detrimental effects of unregulated debt solutions, which often come with high costs and low effectiveness.

The Problem with Quick Fixes in Debt Solutions

Often, individuals struggling with substantial financial vulnerabilities find themselves entrapped in a continuous cycle of debt. The market is flooded with debt settlement companies promising quick fixes to such financial problems. However, not all of these solutions work in the best interest of the consumers.


Note: It is always critical to thoroughly research and ensure that the chosen organization understands your financial needs while presenting all the available options to you.


The Role of Federally Regulated Trustees in Debt Solutions

We recommend seeking out federally regulated trustees for managing your debt. These trustees are licensed by the federal government to administer your bankruptcy or consumer proposal. Their primary role is to help you understand your options, review your situation, advise you on the best course of action, prepare the necessary paperwork, and complete the process from start to finish.

Unscrupulous Companies and the New Ontario Debt Rules

Despite the introduction of these new rules, consumers should remain cautious. Companies that previously exploited borrowers in trouble have already closed up shop in anticipation of the new rules coming into force. However, these new regulations potentially set up a conflict of interest for collection agencies that will now also be able to offer debt settlement services.

The New Collection and Debt Settlement Services Act

Ontario announced in 2013 that it would join provinces like Alberta, Manitoba and Nova Scotia in revising the rules, following increasing complaints about debt settlement companies. The new rules, which took effect on Wednesday, will not affect bankruptcy trustees who are already regulated by Ottawa and are governed by federal rules. The new Collection and Debt Settlement Services Act replaces the Collection Agencies Act.

Changes in Debt Settlement Services

The new rules prohibit debt settlement companies from charging upfront payments, except for a nominal amount. They also limit the amount that can be charged in total. Additionally, debtors receive a 10-day cooling-off period during which they can cancel a debt settlement services contract without providing any reason.

The Importance of Professional Guidance

Bankruptcy trustee Andre Bolduc emphasizes that provincially regulated debt settlement companies aren’t a replacement for federally regulated trustees.


Trustees are obligated to review all possible options for clients, including a bankruptcy filing.

Consequences of Uninformed Decisions

Many clients have reportedly spent a significant amount of money without seeing any reduction in their debt after seeking help from a debt settlement company.

Find Your Personal Debt Relief Solution

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