0004 - Debt Related Queston: Bankruptcy Question # 0004

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QUESTION #0004:

What is the difference between seeking the advice of a Debt Counselor vs. advice from a Trustee?



ANSWER:

Generally, Credit counselors/agencies act as a “middle man” with your creditors. These agencies allow you to make one payment to them and they will funnel these payments to your creditors, once they have deducted their fee. In Canada, there are currently NO government-sponsored debt programs. Even the programs that advertise “Not for Profit” charge fees and often are supported by the credit companies themselves. These programs generally require you to pay 100% of your debt back. Be aware that the educational background, training, reporting and review standards, ethics and fees charged can vary greatly between debt counselors – Anyone can call themselves a “ debt counselor”. A Federal Act governs a Trustee in Bankruptcy. This Act along with professional standards, training, and federal governance and reporting standards gives assurance to both debtors and creditors that standard policies, procedures, ethics and fees are followed. Trustees are the only professionals who can administer either a Consumer Proposal (which allows a debtor to only pay a portion of their debt) or a Bankruptcy. All Trustees offer a FREE consultation.