December 03, 2013 11:21 ET

New Debt Settlement Legislation for Ontario

TORONTO, ONTARIO--(Marketwired - Dec. 3, 2013) - The Ontario government recently passed the STRONGER PROTECTION FOR ONTARIO CONSUMERS ACT, 2013, new legislation aimed at cracking down on unscrupulous debt settlement companies. The new legislation will affect companies that rely on unfair business practices to target vulnerable Ontarians carrying unmanageable debt. Similar legislation to curb abusive and misleading debt settlement practices is already in place in British Columbia, Alberta, Manitoba and Nova Scotia.

Complaints about debt settlement companies have been growing over the last few years. These complaints include:

  • Companies that charge most, if not, all of the fees to consumers before actually starting negotiations with creditors or obtaining an accepted settlement deal.
  • Companies that deny refunds to consumers who have paid for a service that wasn't delivered.
  • Companies that delay negotiating with creditors, leaving consumers in a worse financial position and many times, being sued by their creditors.

If you have been considering contacting a debt settlement company to reduce your debt, consider making a consumer proposal instead. A consumer proposal (also known as a Proposal to Creditors) is a type of debt settlement offered by federally licensed Trustees in Bankruptcy. A consumer proposal is an effective alternative to unregulated debt settlement arrangements and will reduce the amount you owe, so you only need to pay back a portion of your debt. A consumer proposal offers many additional benefits compared to an informal debt settlement arrangement. These benefits include:

  • Stopping harassing phone calls from collection agencies and creditors
  • Stopping creditors from taking any legal action such as wage garnishments
  • Freezing interest charges at the date you file
  • Protecting your assets (car, home, RRSPs, RESPs)

If you are looking for a manageable way to take control of debt, talk to a BDO Trustee about whether a consumer proposal is the right solution for you.

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