Debt causes insomnia for many Quebecers. It is not surprising that alleged financial restructuring advisors are trying to exploit their plight.
As the population’s indebtedness grows, unscrupulous individuals have set up schemes to lure people struggling with their creditors into their networks. A quick fix that’s too good to be true, dubious fees, the impossibility of personal advice… Here are five warning signs that you are not in the right place to pay off your debts.
1. Present solutions that are too good to be true
Advertising on social networks is increasing to offer the services of financial restructuring advisors. “Some are promising a new government program to pay off debts. However, in reality, only Consumer Proposal and Bankruptcy are part of the Bankruptcy and Bankruptcy Code, and Licensed Insolvency Trustees (LITs) are the only professionals authorized to offer them. , specifies André Bolduc, LIT and President of the Canadian Association of Insolvency and Reorganization Professionals.
2. Sell under pressure
Unregulated advisors may also encourage you to make hasty decisions without taking the time to analyze your entire case. “The LITs are required by law to review your financial situation and consider the various possible solutions. “Ultimately, among these we find the consumer proposal and bankruptcy, but above all budget restructuring and debt consolidation,” says André Bolduc.
3. Request an advance payment
Another sign that you are not dealing with a regulated professional: the advisor requires a deposit before even meeting you or providing a service. Another clue that something is wrong: you are being offered to pay these fees with your credit card, which of course is not a good option if you are already in debt.
4. Charging unnecessary fees
“These unregulated financial restructuring advisors may also charge you unnecessary amounts, such as processing fees or administrative costs, for example by demanding payment for sending your file to an SAI,” explains André Bolduc. However, they could have contacted an SAI directly without going through this expensive intermediary.
5. Claim that they can negotiate with creditors on your behalf
Some restructuring consultants claim that they can negotiate with your creditors on your behalf and encourage you to stop communicating with them.
Be careful, because breaking off relations with your creditors could lead to a deterioration in your financial situation and your credit rating. “Only SAIs are authorized to negotiate with your creditors. “In addition, they are not obliged to deal with such advisors,” warns André Bolduc. So ultimately your debts could increase instead of being reduced.
- ADVICE
- Do your research and verification before working with an advisor. Be wary of those that only offer online services, do not have an office in Canada, or whose addresses appear unclear.
- Please note that LITs are required by law to provide personal services if their client requests it, regardless of the stage of their case.
- In general, the first consultation with an LIT to review your file is free and non-binding for you.
- LITs must have a license from the Office of the Superintendent of Bankruptcy (OSB) to practice. To ensure you are doing business with one of them, or to find one in your area, consult the BSF’s Register of LITs and LIT Firms here.