Thanks Daniel for your insightful reply.

I will ensure the next time I promote my free advice that I spend more time worrying about grammar- or perhaps you could highlight my errors and send it to me so when I spam some other forums it appears that I have an office.

Did you find the information helpful?

I will let Mark know the next time I meet with him that you're a big fan, and ensure that I get a signed copy of his new book soon to be released.

Any other important information you'd care to discuss please call me directly, we can chat in the comfort of my kitchen.

Your get-out-of-debt options are plentiful and grow more abundant daily- but how many companies offering you “quick and easy solutions” truly have your best interests at heart and how do you differentiate between them? Here is a quick, easy and essential checklist to determine who can really help you resolve your debts- fast and properly.

1.) Does the company have a collection agency license?

Any third party offering services as a debt negotiator MUST be licensed under the Collection Agency Act. If they aren't, they are not legitimate, and in addition to being dangerously un-educated and inexperienced can face fines of up to $250,000 for contravening the law.

2.) Does the company promise to reduce your debt by up to an outrageous figure?

It is very important to note that any legitimate company will not make any assertions about the amount of money, or percentage of your debts that can be alleviated. Settlements are granted on a number of factors, and none can be pre-determined. If a company offers any form of estimation before assessing your finances and calling your creditors, they clearly have limited experience in dealing with collectors.

3.) Does the company proclaim to consolidate debts and offer 1 low monthly payment?

The majority of debt settlement companies use the appealing phrase “one low monthly payment”. This can mean a few different things- most of them disturbing and ominous. “One low monthly payment” usually means either:

A) The company intends to offer your creditors a settlement for pennies on the dollar spread over a period of years. In this case, most creditors decline the offer and proceed with a lawsuit, affecting your credit for 10 years as a public record judgment; or

B) The company intends to make your creditors wait while they pool money over the course of a few years for a penny on the dollar settlement payout- which most major creditors decline outright and proceed with a lawsuit.

Although option A) is slightly more favorable, both of these options ensure that your credit remains tarnished for not only the 7 years it would have had you not paid, but longer as the 7 year statute period ends upon the final payment on the account- which can be upwards of 12 years. When you take into account accruing interest and monthly service fees charged by these types of companies, a bankruptcy becomes a better option than either of the above- but these companies will not advise you of this at the risk of reduced profit margins. The worst part is, once you’ve signed a power of attorney, your creditors can no longer contact you, and you will be unaware of a lawsuit until the judgment is enforced- at which time you have only 20 days to file a defense and avoid severe repercussions.

4.) Does the company offer credit rehabilitation?

Commonplace in this industry is the art of deceit. Many companies proclaim to offer credit rehabilitation- which is an essential part of the debt settlement process. Ask the company what credit rehabilitation means, and I’m dubious that you will find the correct response- at least until they are mandated to acquaint themselves as a direct result of this article. In order to properly rebuild your credit, it is important to obtain new financing through high risk lenders and secured credit cards to prove your worthiness as a consumer. There are a number of ways to accomplish this.

5.) Does the company offer you options, and allow you to make the decisions?

As mentioned above, once the power of attorney resides with your debt settlement company, your creditors will no longer be able to contact you- great right? Wrong. Despite the guarantees and assurances made by your agent, it’s still not their credit, their life. Many of these companies induct you into a program that simply isn’t right, because it’s the most profitable and convenient for them. The right way of going about this process is transparency, you, the client MUST be involved in every decision and informed of all possible outcomes.

Recently across our southern border, a scandal unfolded whereby debt settlement companies were charging massive fees, not actually completing any work and simply refusing to refund any money- what’s worse is they are now migrating north, obtaining the licensing to practice their illicit schemes in Canada. Making a good, informed decision on not only which company to use, but which type of program is crucial to the well being of you and your family. One bad decision can cost you much more than just money- but careers and relationships. This article was written by a former bill collector, and manager who made his lavish living for a period of 7 years off of the delinquent consumer population. Recently I founded a consumer advocacy company in Aurora Ontario, and am sharing this with you in the hopes of changing the dynamic of the credit & collection industry. Consumers always construe the bill collector as the bad guy- and in many cases they’re right- but even worse are the deceptive practices of many of the companies portraying themselves as your allies in your most vulnerable state.

I offer my time, on the phone or in person, free for anyone undergoing financial difficulties, or who has questions about credit, collections, or debt settlement. I look forward to speaking with you soon.

Josh

jbalner@compliancefirstfinancial.com
Mobile 416 910 0601