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CBC News has revealed that the Ontario government’s plan to rein in companies that offer to pay off consumer debts at a steep price took a positive step forward this week. The Liberals’ new bill, to be introduced at Queen’s Park Wednesday, would bring in long-requested regulations aimed at debt-settlement agencies that promise to pay off clients’ bills for pennies on the dollar.

Best of all, this new bill is designed to limit debt settlement agency fees in Ontario and ban the companies from charging their clients up-front fees.

“Ontario consumers need to have confidence that they’re getting what they pay for when purchasing debt settlement services. We’re going to introduce legislation that would protect some of our most vulnerable consumers from being taken advantage of, at a time when they need the most help.” Minister of Consumer Services Tracy MacCharles said Tuesday in an interview with the Toronto Star.

According to the Ministry, the average consumer debt in Ontario is more than $25,000 per person. In some cases, people who use these services are charged thousands of dollars with little or no debt relief to show for it. The majority of debt-settlement firm clients ultimately end up in the offices of a Licensed Insolvency Trustee, such as our firm.

If the bill passes, Wynne’s Liberal government has indicated that companies which break the rules could lose their licence to operate in Ontario (though many of these firms don’t currently operate under any sort of license anyhow). The new rules being introduced also include:

  • A limit on the fees that consumers can be charged
  • Banning companies from charging up-front fees for debt settlement services
  • Clear, understandable contracts must be used
  • Establish a 10-day cooling-off period, giving clients time to change their minds

CBC News interviewed author and television personality Gail Vaz-Oxlade (who hosts the television shows ‘Til Debt Do Us Part and Princess) for some feedback on the new legislation. “Ontarians work hard for their money. Why just give it away to a company that is going to take your up-front fee but not actually settle with your creditors?” asked Vaz-Oxlade.

Here at A. Farber & Partners we specialize in debt relief programs. But unlike the debt settlement firms the Ontario Government is preparing to regulate, we are already fully licensed by the Federal Government and regulated by the Bankruptcy and Insolvency Act.

In a simple and straightforward manner we can explain to you the differences between Consumer Proposals, Bankruptcy and Debt Consolidations (some of the options available to you for debt management). We can provide you with relief from your debt pressures, ranging from credit card debts to your tax debt.

Unlike the debt settlement firms, we don’t ask for any fees upfront, and will provide you with an affordable, monthly payment plan to clear up your debts. And we always offer a free, no-obligation consultation at one of our 50+ offices.

When you use the services of a Licensed Insolvency Trustee, it’s important to understand that Bankruptcy is NOT your only option – the majority of our clients opt for A consumer proposal, which is an alternative to bankruptcy and allows them (with our assistance) to craft a fair settlement offer to their creditors for as low as thirty percent of their total unsecured debt-load (including tax debt). A consumer proposal (unlike the programs marketed by debt settlement firms) offers complete legal protection from creditors, including protection from wage garnishments, lawsuits and the seizure of property.

When you come to see us for your free consultation we will explain the entire process to you, show you how to deal with your creditors (without any up-front fees or vague promises) and put together a proactive plan to help you rid yourself of your debt.

The end result? Greater financial security, more money left in your pocket at the end of the process and a successful resolution to your financial pressures.

Book a free Debt Solution Consultation