Due to the COVID-19 pandemic, Canadians have found themselves under significant financial pressure just to make ends meet. If the situation is particularly bad, there may be phone calls from creditors or debt collection agencies.

If you are wanting to get your financial situation under control, you may decide to start looking for help beyond government financial assistance and may explore some of the debt relief options you’ve seen advertised that promise to help you get out of debt. There are many debt management options to choose from and it can be difficult to make an informed decision when you feel like you’re in over your head. Before you sign up for any service that promises to help you get rid of your financial woes, make sure you know what to expect.

Remember, you can always speak to your creditors and/or credit card company directly to try to negotiate a lower interest rate or to work out a repayment plan. And ignoring a debt doesn’t make it go away.

Tips to make an informed decision

Here are some tips to help you when considering a debt management option:

  1. Start by doing your research. There are different laws for different debt relief services. Find out which businesses are licensed and/or regulated. For example, debt repayment agents are licensed and regulated in BC by Consumer Protection BC (check their licence status).
  2. See what others have to say. Look into what other consumers have to say about their experiences with a business. You can also check with the Better Business Bureau to see if there are any complaints filed against the business.
  3. Don’t believe all testimonials. Businesses may use false or misleading testimonials from customers to promote their success. Recognize that a testimonial may actually be inaccurate or fake.
  4. Ask questions. How does the proposed debt relief service work? Can it affect your credit report? Does it carry any potential financial risks or other possible consequences? What are the fees? When do you have to pay the fees? What are they guaranteeing? What are they actually doing – are they offering to do work that you could easily do yourself?
  5. Be cautious of any guarantee that your debt will be reduced. There is no guarantee that your creditors will accept your specific debt settlement proposal. Only Licensed Insolvency Trustees, federally regulated by the Office of the Superintendent of Bankruptcy, are authorized to administer government-regulated insolvency proceedings that allow you to be discharged from debt, such as consumer proposals or bankruptcies. 
  6. Know the rules and get it in writing. In BC, debt repayment agents must give you a written contract with specific information, including the fees to be paid and when they must be paid. And, by law, they can’t charge you up-front fees until you’ve agreed to the repayment proposal.
  7. Read the fine print. Always read the terms and conditions before signing up. You may find yourself paying for something you didn’t expect. 
  8. Be realistic. If the offer seems too good to be true, it probably is. Getting out of debt is not something that can be done quickly.

Have a complaint?

Complaints against debt repayment agents in BC should be directed to us. If you believe that you’ve been misled, file a complaint with the Competition Bureau. If you believe you are the victim of a scam or fraud, report it to the Canadian Anti-Fraud Centre or your local police.

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About Consumer Protection BC:  

We are responsible for regulating specific industries and certain consumer transactions in British Columbia. If your concern is captured under the laws we enforce, we will use the tools at our disposal to assist you. If we can’t help you directly, we will be happy to provide you with as much information as possible. Depending on your concern, another organization may be the ones to speak to; other times, court or legal assistance may be the best option. Explore our website at www.consumerprotectionbc.ca.