Stay Away from Unregulated, Unlicensed Debt Advisors & Financial Advisors

Why You Only Need a Licensed Insolvency Trustee For Debt Relief

With an increasing number of unregulated, unlicensed debt advisors and financial advisors offering their services, it is crucial for consumers to understand the risks involved in consulting with them. This article provides an in-depth analysis of the subject, shedding light on why these advisors are not the ideal choice for financial advice.

Understanding the Landscape

As a Licensed Insolvency Trustee (LIT), my role involves guiding individuals through complex financial situations. We start with a free consultation, comprehend their financial status, and then lay out all possible solutions. This could involve services that we provide or others that we don’t.

Being an LIT or an Insolvency Restructuring Professional (IRP), we are obligated to undergo a specified number of hours of Mandatory Professional Development each year to retain our licenses and hone our skills. We are governed by the Office of the Superintendent of Bankruptcy (OSB) and comply with the ethical standards of our professional association, Canadian Association of Insolvency and Restructuring Professionals (CAIRP).

The Red Flags: Unregulated, Unlicensed Debt Advisors

Unlicensed debt advisors, often termed as Financial Advisors, Debt Consultants, Debt Advisors, Debt Counsellors or Credit Counsellors are unregulated. They are not governed by any authority, have no specified Code of Ethics, and essentially report to no one. Moreover, they are not required to obtain a license, and their fees are not dictated, allowing them to charge any amount they deem fit, as long as the consumer agrees to it.

Pitfalls of Consulting Unregulated, Unlicensed Debt Advisors

Unregulated, unlicensed debt advisors can be a risky choice due to several reasons:


Lack of Protection: Unlike LITs who can provide a Stay of Proceedings that halts any legal action, these advisors do not offer any protection while a settlement is under negotiation. This can lead to persistent fear and stress for the debtor.

Upfront Payments: These advisors often demand a large sum of money before initiating the process, leaving the debtor to deal with harassing collection calls.

Government Debt: Unregulated advisors cannot include government debt in the debt they are negotiating. On the contrary, LITs can include government debt in their programs, with few exceptions that are clearly specified during the free consultation.

High-interest Loans: Some of these advisors offer high-interest loans to pay off your debt, worsening your financial situation.

False Advertising: Some unregulated advisors falsely claim to be part of a government program, which is not true. Only LITs are licensed and regulated by the government to provide debt solutions.

Potential Scams: There are instances where these advisors are simply scams. The money paid to them is lost with no way to recover it.


In Contrast: Licensed Insolvency Trustees

As Licensed Insolvency Trustees, we are passionate about helping individuals find the right financial solutions. We are committed to maintaining the highest ethical standards of our profession and providing complete transparency in our dealings.

The Bottom Line

If you’re seeking financial advice, it is essential to do thorough research. Check if your advisor is licensed and regulated. Look for a brick and mortar office location and identify the employees and their contact details.

Remember, Licensed Insolvency Trustees are your go-to professionals for navigating through your financial situation, whether it’s a minor setback or a major crisis. Staying away from unregulated, unlicensed debt advisors and financial advisors is the wisest move you can make.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

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