CALGARY, ALBERTA -- (Marketwired) -- 04/03/13 -- Despite the fact that many provinces have recently passed legislation to protect consumers from debt settlement companies, Canadians facing money problems may still be getting burned. With consumer debt in Canada now over $477 billion, many are seeking help from debt settlement firms offering to virtually eliminate credit card and unsecured debt. It's an alluring promise for those sliding toward bankruptcy.
"There is a lot of fear and shame associated with bankruptcy. Many believe that debt settlement firms offer a more amenable option," says David Smith, President of Personal Bankruptcy Canada, a nationwide network of independent trustee practices that help people deal with debt. "The reality is that many consumers don't emerge from debt settlement programs with their credit card balances eliminated. In fact, they may end up worse off."
Many debt-burdened Canadians don't understand the full gamut of services that licensed personal bankruptcy trustees offer. Experts in debt management, trustees provide debt relief services such as: consumer proposals, credit counseling as well as bankruptcy. Trustees are licensed by the federal government of Canada and they have the ability to officially discharge debts. Debt settlement companies - no matter how enticing their claims - have no legal ability to discharge debts or offer court protection from creditors.
"We often see people in our offices who engaged debt settlement companies when they initially recognized their inability to meet their repayment obligations. By the time they meet with us their only option is bankruptcy," says Smith.
Those pushing their financial limits are advised to speak with a personal bankruptcy trustee before entering into a debt settlement. Trustees are the only debt professionals that can offer a full range of debt relief and guaranteed protection from creditors. They can also provide referrals to local, reputable credit counseling agencies.
"Once people are in severe financial difficulty, for whatever reason, it is in everybody's interest - theirs, lenders', family - that they speak with a trustee to get the best advice. Unlike debt settlement firms, trustees have a legal requirement to understand each client's financial situation and review options so the right debt solution is identified and pursued," says Smith.
About Personal Bankruptcy Canada
Personal Bankruptcy Canada is a free website that provides consumers with general debt and bankruptcy resources, including access to highly qualified bankruptcy trustees across the Canadian provinces and valuable education information on bankruptcy and debt management.
Personal Bankruptcy Canada member trustees from across the country are available for local media interviews regarding bankruptcy, debt and financial literacy. To schedule an interview please contact Angela Joyce.
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