The Ontario government has announced proposed legislation to prevent debt settlement companies from charging consumers huge up front fees for doing nothing. According to the government press release:
Through new regulations, the government will:
- Ban debt settlement companies from charging up-front fees
- Limit the amount of fees consumers are charged
- Require clear, transparent contracts
- Implement a 10-day cooling-off period.
Under current law, bankruptcy trustees in Ontario are regulated by the federal government, so we support legislation that will “level the playing field” and prevent others from making promises that they can’t keep.
If you have debt, instead of paying a lot of money to a debt settlement company that won’t talk to your creditors at the start of the process, a better option may be a consumer proposal, where your trustee makes a deal with your creditors at the start of the process.
Even better, there are no up front fees. You don’t pay anything until the proposal is filed, and you have received protection from your creditors.
We will monitor this legislation and post more news as it is available. For further information, contact an Ontario consumer proposal administrator for a no charge initial consultation.