I was listening to the radio this morning and I heard a commercial for a National Debt Relief Program available to people that owed more than $10,000 to their creditors.
The first thing that I asked myself is why do you have to owe at least $10,000 in order to qualify? The second thing I asked myself was is this a government sponsored program?
So I did some searching on the internet and just as I thought, it looks like it is just another company that will try to negotiate an informal settlement with your creditors.
Many of these companies will suggest to you to stop paying your creditors and let your debts go into default. After several months your account will be sent off to a collection agency. The longer your debt stays at a collection agency the more likely they will be to negotiate a settlement. Their website says that they can settle your debts by 40-60%. One of the biggest problems with this strategy is that you are going to be harassed to the point of insanity by collection agencies. If you are lucky they won’t sue you and garnishee your wages, but you will wake up every day wondering if it is going to happen.
Filing a consumer proposal in Canada is a formal way of dealing with your creditors. It is a much simpler and far less stressful approach. You do not have to owe more than $10,000 to your creditors. You do not have to qualify. You do not have to wait for your payments to be in default to file a proposal. Once your proposal is filed you are protected from your creditors. They cannot sue you or garnishee your wages. A proposal can only be filed through a Trustee. A Trustee is licensed through Industry Canada.
If you would like to learn more about your options, contact a trustee about you options.