40 – Debt Settlement: New Laws and a Better Approach

Before now, there really were no rules governing debt settlement companies in Ontario, which meant that they could charge large up-front fees, only to refer the client to a bankruptcy trustee once legal action was taken by a creditor. The process has already started and on January 1st, 2015 the Collection Agency Act was renamed the Collection and Debt Settlement Services Act.

On today’s show Ted Michalos talks about the new legislation and what it means for consumers.

We often hear that clients are afraid to seek help from a trustee in bankruptcy because of the stereotypes and misconceptions about the process. Debt settlement companies feed off this fear by placing ads claiming to be able to settle their debts for pennies on the dollar, while avoiding bankruptcy. Unfortunately, more often than not, these informal debt settlement companies fail, hurting the consumer both emotionally and financially. The new debt settlement legislation attempts to protect consumers from these abuses.