If you owe debt on loans and credit cards and are at the point where you are only making your minimum monthly payments, it may be time for some intervention.
Making minimum payments on credit cards often means that you are only paying interest. If making minimum payments is all that you can afford to pay, then essentially the credit card debt will never get paid down.
If you own a home one of the easiest way to consolidate debt is through a mortgage. The challenge is choosing the right mortgage product.
In the finance business everything comes down to money. Banks, lenders and brokers are all incented based on their volumes. The more money they loan, the longer the terms, the more the financial institutions make. Sometimes going directly to a financial institution or a mortgage broker for financial advice is not the best choice. Often the first solution that a mortgage lender will present to you will be the one that earns them the most money. That first solution is refinancing your first mortgage.
The amount of debt that you have, the type of debt that you have, your current mortgage rate and terms, the amount of equity in your home, your credit and your overall financial profile will determine the best strategy to pay off your debt and what resources may be available to you.
If you owe less than $30,000, a second mortgage may be the best choice. Yes, second mortgages often bear a slightly higher interest rate, however they stand completely independent of your first mortgage and offer more flexibility. You can amortize your second mortgage more aggressively so instead of stretching it out over 25-30 years like a first mortgage, you can opt for a shorter amortization that will result in less overall interest and still reduce your monthly payments.
If you owe a significant amount of money, then refinancing your mortgage may be the best choice. However you can refinance your mortgage in a way that not only eliminates the debt but also your overall interest. You can achieve this through obtaining a lower mortgage rate than what you are currently paying, commit to accelerated mortgage payments or reduce your amortization by 5 years. Most folks don’t even realize that simply reducing their mortgage amortization by 5 years will save them tens of thousands of dollars in mortgage and interest payments.
It may be that a mortgage is not even the best choice at all. If you owe more debt than you have property equity, then you may need other financial resources to get out of debt.
The only way to receive impartial advice about how to use your home equity to consolidate debt is to hire a financial advisor to work with you to come up with a financial strategy to get out of debt. For more information please visit http://www.debtcare.ca/
Monday, 15 August 2011
Monday, 8 August 2011
Avoid Bankruptcy through Personal Debt Management
Personal debt management is easier said than done. No person chooses not to pay his or her bills. If you don’t have the money, you don’t have the money. Debt can become unmanageable for so many reasons.
Regardless of the reason, whether you have lost income or you have simply become over extended, all reports indicate that the economy is improving. Canadians are looking for options to deal with debt without sacrificing their dignity and without filing for bankruptcy.
There are pro’s and con’s to bankruptcy. If you have no means whatsoever to pay your bills, are being garnished or have collection agencies after you, bankruptcy may be the best choice. Bankruptcy immediately protects you from your unsecured creditors and stops most collection action. The drawback to bankruptcy is, it is a long process, is often expensive and has a negative impact upon your credit. The choice to file for personal bankruptcy is one that should be considered carefully.
Statistics show that Canadians are looking for other financial choices to pay off debt. The challenge is simple, it seems that no matter where you turn someone has an agenda.
The banks often pay mortgage brokers. The banks promote their products to brokers and different products carry different incentives. The larger the mortgage and the longer the mortgage term, the more the mortgage broker earns from the bank. On that basis, if a small short-term second mortgage is the best solution, a mortgage broker may propose that you refinance your entire first mortgage. Sometimes it is better to pay the mortgage broker fee yourself and negotiate a shorter term more flexible mortgage product.
Many debt companies that promote “debt consolidation” only offer two choices, consumer proposal or bankruptcy. The best way to know if you are dealing with one of these companies is to ask them what options they offer other than bankruptcy and consumer proposals.
Of course, if you turn to your bank and they offer you help at all, it will come in the form of a credit product that yields them the most benefit. Most financial services representatives in banks are paid different incentives based on the products and services that they sell to you.
So what can you do when you need help with personal debt management and at the same time want to avoid bankruptcy altogether? Hire a company that offers a wide range of financial counselling services to help you find a solution to your money problems.
Here are a few good rules of thumb when looking for a good financial advisor:
You get what you pay for! It is better to pay for a service that is impartial and can help you make responsible financial choices vs. trying to sell you products and services.
Do lots of research. If you find a company, read through their website. See how diverse their ranges of services are. For example, debt counselling services that only offer federal government programs as the solution indicate that there is no incentive to encourage you not to participate if there is another option available that they don’t offer. Google the companies’ name to see if they have lots of credible published literature online or search for positive client reviews. Ask lots of questions to ensure that whatever personal debt management program you chose, you have chosen one that gives the most consideration to your credit and future financial goals.
For more information about how to avoid bankruptcy through personal debt management please visit http://www.debtcare.ca/
Regardless of the reason, whether you have lost income or you have simply become over extended, all reports indicate that the economy is improving. Canadians are looking for options to deal with debt without sacrificing their dignity and without filing for bankruptcy.
There are pro’s and con’s to bankruptcy. If you have no means whatsoever to pay your bills, are being garnished or have collection agencies after you, bankruptcy may be the best choice. Bankruptcy immediately protects you from your unsecured creditors and stops most collection action. The drawback to bankruptcy is, it is a long process, is often expensive and has a negative impact upon your credit. The choice to file for personal bankruptcy is one that should be considered carefully.
Statistics show that Canadians are looking for other financial choices to pay off debt. The challenge is simple, it seems that no matter where you turn someone has an agenda.
The banks often pay mortgage brokers. The banks promote their products to brokers and different products carry different incentives. The larger the mortgage and the longer the mortgage term, the more the mortgage broker earns from the bank. On that basis, if a small short-term second mortgage is the best solution, a mortgage broker may propose that you refinance your entire first mortgage. Sometimes it is better to pay the mortgage broker fee yourself and negotiate a shorter term more flexible mortgage product.
Many debt companies that promote “debt consolidation” only offer two choices, consumer proposal or bankruptcy. The best way to know if you are dealing with one of these companies is to ask them what options they offer other than bankruptcy and consumer proposals.
Of course, if you turn to your bank and they offer you help at all, it will come in the form of a credit product that yields them the most benefit. Most financial services representatives in banks are paid different incentives based on the products and services that they sell to you.
So what can you do when you need help with personal debt management and at the same time want to avoid bankruptcy altogether? Hire a company that offers a wide range of financial counselling services to help you find a solution to your money problems.
Here are a few good rules of thumb when looking for a good financial advisor:
You get what you pay for! It is better to pay for a service that is impartial and can help you make responsible financial choices vs. trying to sell you products and services.
Do lots of research. If you find a company, read through their website. See how diverse their ranges of services are. For example, debt counselling services that only offer federal government programs as the solution indicate that there is no incentive to encourage you not to participate if there is another option available that they don’t offer. Google the companies’ name to see if they have lots of credible published literature online or search for positive client reviews. Ask lots of questions to ensure that whatever personal debt management program you chose, you have chosen one that gives the most consideration to your credit and future financial goals.
For more information about how to avoid bankruptcy through personal debt management please visit http://www.debtcare.ca/
Thursday, 4 August 2011
Personal Money Management and Money Management Skills through Personal Budgeting
Everyone is different, but one thing that we all have in common is that we all spend money. Some are more aware of their spending than others. Those who are highly aware of their spending habits are so for one of three reasons: they follow a budget, they have little to no income, or they are living paycheque to paycheque because they have extended their credit, beyond what they can afford.
A personal budget is the key to effective personal money management because it creates awareness of each and every dollar you spend. Outside of a loss of income, the most common reasons that folks cannot make ends meet are:
1. Lack of awareness of spending
2. Careless spending
3. Impulsive spending
4. Overuse of credit
When you are running on a tight budget any number of seemingly innocent things can send you into financial turmoil. Buying a vehicle or home that is too expensive or any unexpected expense, could spell financial disaster. Working towards better money management skills starts with refining your budget.
A personal budget should include all of your expenses, right down to how much you spend on coffee each day. Sometimes it can feel like our budget is tight and there is no room for improvement, but there often is room for improvement.
Your personal budget should consist of four sections. Housing, which includes your payments to rent, mortgages, property taxes, property maintenance and insurance. Transportation, which includes payments to vehicles, vehicle insurance, vehicle maintenance, bus/train passes, parking, gas, etc. Personal, which includes the money you spend on food, utilities, phone bills, entertainment, education, childcare and any other personal monthly household expenses. Finally, liabilities, which are the payments you make to loans, credit cards and other people you owe money to.
Prepare your budget in a table that has a column that represents the type of expense, a column that represents monthly cost and a third column that represents the areas in the budget that can be reduced. Go through your budget and indicate the places where you can save and by how much.
At times personal budgeting can be scary. It forces you to face your monthly expenses and if you can’t find ways to improve, you may feel deflated. Sometimes it pays to realize that you may need help with your budget. A professional financial counsellor will not only help you create an effective budget, but they also have access to other resources that may ease the process of achieving your financial goals. For more information about personal money management and money management skills through personal budgeting please visit http://www.debtcare.ca/
A personal budget is the key to effective personal money management because it creates awareness of each and every dollar you spend. Outside of a loss of income, the most common reasons that folks cannot make ends meet are:
1. Lack of awareness of spending
2. Careless spending
3. Impulsive spending
4. Overuse of credit
When you are running on a tight budget any number of seemingly innocent things can send you into financial turmoil. Buying a vehicle or home that is too expensive or any unexpected expense, could spell financial disaster. Working towards better money management skills starts with refining your budget.
A personal budget should include all of your expenses, right down to how much you spend on coffee each day. Sometimes it can feel like our budget is tight and there is no room for improvement, but there often is room for improvement.
Your personal budget should consist of four sections. Housing, which includes your payments to rent, mortgages, property taxes, property maintenance and insurance. Transportation, which includes payments to vehicles, vehicle insurance, vehicle maintenance, bus/train passes, parking, gas, etc. Personal, which includes the money you spend on food, utilities, phone bills, entertainment, education, childcare and any other personal monthly household expenses. Finally, liabilities, which are the payments you make to loans, credit cards and other people you owe money to.
Prepare your budget in a table that has a column that represents the type of expense, a column that represents monthly cost and a third column that represents the areas in the budget that can be reduced. Go through your budget and indicate the places where you can save and by how much.
At times personal budgeting can be scary. It forces you to face your monthly expenses and if you can’t find ways to improve, you may feel deflated. Sometimes it pays to realize that you may need help with your budget. A professional financial counsellor will not only help you create an effective budget, but they also have access to other resources that may ease the process of achieving your financial goals. For more information about personal money management and money management skills through personal budgeting please visit http://www.debtcare.ca/
Tuesday, 26 July 2011
Canadian Debt Consolidation Pros and Cons
Canadian Debt Consolidation options are vast, especially in urban centres like Toronto. It seems that everywhere we turn there is an advertisement about debt consolidation.
What exactly is debt consolidation? This is an important question because while “technically” it involves making a single payment to deal with all of your debt, depending on the type of debt consolidation, it can result in endless payments and destruction of your credit.
Traditionally a debt consolidation included going to a bank or other lender, obtaining a loan, paying all of your debts in full and then making a single payment to a new creditor.
In the past few years different federal government programs have been introduced that provide immediate debt relief and involve making a single payment to a single company – but these debt consolidations do not involve paying off creditors in full. We call these “Debt Relief” debt consolidations.
Debt relief and debt consolidations are meant to be used if you have major financial problems. They involve freezing interest, reducing debt and making a single payment monthly that fits within your current budget. They also come with tough financial choices that include not honouring your agreements to your creditors and damaging your credit (if you haven’t already); this is an important consideration.
Credit counsellors provide similar types of “Debt relief” consolidation programs. Consolidation programs offered through credit counselling will damage your credit. Unlike programs that have been made available by the federal government these programs may freeze your interest but in most cases will not involve freezing your principal debt.
Traditional consolidation loans still exist, but are harder to come by. Most banks (if you qualify) will always offer a line of credit as a first debt consolidation option. These generally carry low interest rates, however they are like taking out a large credit card and are very challenging to pay off because of the monthly interest payments. If you have a lot of debt, the interest may represent a large amount of your minimum payments.
Many folks also use mortgage agents and mortgage brokers to deal with debt. This is also a good choice because the interest is low. Who you deal with to arrange your mortgage will determine the deal you get. To get the best deal it is imperative to deal with a broker who can handle all types of credit and financial circumstances. If you deal with a broker who primarily manages banks – you may find their attitude towards you change if you don’t qualify with the bank.
The best choice you can make is to have a strong relationship with a good financial consultant. Not a debt counsellor, not a bank, not a broker – a financial consultant. They will be able to look impartially at the state of your finances and help guide you through good financial choices that address your short term and long term financial goals.
For more information about Canadian Debt Consolidation pros and cons please visit http://www.debtcare.ca/
What exactly is debt consolidation? This is an important question because while “technically” it involves making a single payment to deal with all of your debt, depending on the type of debt consolidation, it can result in endless payments and destruction of your credit.
Traditionally a debt consolidation included going to a bank or other lender, obtaining a loan, paying all of your debts in full and then making a single payment to a new creditor.
In the past few years different federal government programs have been introduced that provide immediate debt relief and involve making a single payment to a single company – but these debt consolidations do not involve paying off creditors in full. We call these “Debt Relief” debt consolidations.
Debt relief and debt consolidations are meant to be used if you have major financial problems. They involve freezing interest, reducing debt and making a single payment monthly that fits within your current budget. They also come with tough financial choices that include not honouring your agreements to your creditors and damaging your credit (if you haven’t already); this is an important consideration.
Credit counsellors provide similar types of “Debt relief” consolidation programs. Consolidation programs offered through credit counselling will damage your credit. Unlike programs that have been made available by the federal government these programs may freeze your interest but in most cases will not involve freezing your principal debt.
Traditional consolidation loans still exist, but are harder to come by. Most banks (if you qualify) will always offer a line of credit as a first debt consolidation option. These generally carry low interest rates, however they are like taking out a large credit card and are very challenging to pay off because of the monthly interest payments. If you have a lot of debt, the interest may represent a large amount of your minimum payments.
Many folks also use mortgage agents and mortgage brokers to deal with debt. This is also a good choice because the interest is low. Who you deal with to arrange your mortgage will determine the deal you get. To get the best deal it is imperative to deal with a broker who can handle all types of credit and financial circumstances. If you deal with a broker who primarily manages banks – you may find their attitude towards you change if you don’t qualify with the bank.
The best choice you can make is to have a strong relationship with a good financial consultant. Not a debt counsellor, not a bank, not a broker – a financial consultant. They will be able to look impartially at the state of your finances and help guide you through good financial choices that address your short term and long term financial goals.
For more information about Canadian Debt Consolidation pros and cons please visit http://www.debtcare.ca/
Monday, 18 July 2011
Getting Rid of Debt without Declaring Bankruptcy and without Losing Your House and Car
The good news is that in Canada the economy seems to be looking up. People are going back to work and bankruptcy rates are down; however some families are left picking up the pieces. The pieces left to be picked up include accumulated debt, a record of late payments and bruised credit. It could be worse; you could have been one of the thousands of Canadians forced into bankruptcy during the recent recession.
The reason that bankruptcy rates in Canada are on the decline is two-fold.
One cause is recent changes to the Bankruptcy Act in Canada. The changes make it much more difficult, much more expensive and a much longer process to file for bankruptcy.
Another reason that bankruptcy rates are declining is that Canadians generally have been more optimistic about the economic outlook in Canada and are looking for other ways to deal with their debt. While it is nice right now that things are looking up, historically low interest rates are what continue to prop up the economy.
Interest rates have nowhere else to go but up. The is the natural course – as the economy improves, interest rates rise; if the economy falters, interest rates are frozen or reduced – this we saw in the recent recession and continue to experience post-recession.
Last year in addition to changing bankruptcy laws, they tightened lending requirements on CMHC insured mortgage products in an effort to force Canadians to borrow more responsibly. The Bank of Canada and major banks continue to release opinions concerning the high levels of debt that Canadians are carrying.
Another reason that bankruptcy rates are declining is that Canadians have more options than ever to deal with debt. There are many different types of companies that promote solutions to consolidate debt and/or get out of debt. The tricky part is figuring out which one you should deal with.
Banks who promote consolidation loans require good credit and often involve consolidating the debt into a single payment but they do not provide meaningful long-term strategies to get the debt paid off. Why? Because as long as you have the debt they are earning interest.
Finance companies offer consolidation loans but the interest rates often exceed 20%. Mortgage brokers offer mortgage options to consolidate debt; these options can involve stretching your debt out over 15, 20 or even 30 years.
Credit counsellors, debt counselling companies and trustees may offer options that can provide immediate debt relief – however they often won’t highlight how these options will destroy your credit.
We are the first organization to offer a program to consumers that it not one-dimensional. We can access all of the resources listed above and more. Financial Consulting is an emerging industry that involves helping consumers work through all of the solutions that are available to them. For more information about getting rid of debt without declaring bankruptcy please visit http://www.debtcare.ca/
The reason that bankruptcy rates in Canada are on the decline is two-fold.
One cause is recent changes to the Bankruptcy Act in Canada. The changes make it much more difficult, much more expensive and a much longer process to file for bankruptcy.
Another reason that bankruptcy rates are declining is that Canadians generally have been more optimistic about the economic outlook in Canada and are looking for other ways to deal with their debt. While it is nice right now that things are looking up, historically low interest rates are what continue to prop up the economy.
Interest rates have nowhere else to go but up. The is the natural course – as the economy improves, interest rates rise; if the economy falters, interest rates are frozen or reduced – this we saw in the recent recession and continue to experience post-recession.
Last year in addition to changing bankruptcy laws, they tightened lending requirements on CMHC insured mortgage products in an effort to force Canadians to borrow more responsibly. The Bank of Canada and major banks continue to release opinions concerning the high levels of debt that Canadians are carrying.
Another reason that bankruptcy rates are declining is that Canadians have more options than ever to deal with debt. There are many different types of companies that promote solutions to consolidate debt and/or get out of debt. The tricky part is figuring out which one you should deal with.
Banks who promote consolidation loans require good credit and often involve consolidating the debt into a single payment but they do not provide meaningful long-term strategies to get the debt paid off. Why? Because as long as you have the debt they are earning interest.
Finance companies offer consolidation loans but the interest rates often exceed 20%. Mortgage brokers offer mortgage options to consolidate debt; these options can involve stretching your debt out over 15, 20 or even 30 years.
Credit counsellors, debt counselling companies and trustees may offer options that can provide immediate debt relief – however they often won’t highlight how these options will destroy your credit.
We are the first organization to offer a program to consumers that it not one-dimensional. We can access all of the resources listed above and more. Financial Consulting is an emerging industry that involves helping consumers work through all of the solutions that are available to them. For more information about getting rid of debt without declaring bankruptcy please visit http://www.debtcare.ca/
Monday, 11 July 2011
Collection Agency Harassment is Common and You Can Stop It
The number one tactic that collection agencies employ to entice you to negotiate with them is by simply harassing you, every which way.
In extreme cases we have had clients tell us about collection agencies who have used the following aggressive collection tactics to force a dialog:
- Sending an abundance of mail with collection agency letterhead to the residence
- Sending mail to the consumer at work
- Calling the consumer at work and/or leaving messages with co-workers
- Contacting the consumers payroll department
- Leaving descriptive messages on the consumers voice mail
- Calling the consumer multiple times daily, even at night and on Sundays
Especially in Ontario, there are a number of protections in place that protect consumers from “over the top” collection agency tactics. The Ministry of Consumer Services regulates collection agencies and the Ministry of Consumer Services licenses all collectors in the Province of Ontario.
When a consumer has a problem with a collection agency they can file a complaint against the collector personally or against the collection agency. If the Ministry agrees that you have a valid complaint they will write to the collection agency requesting a response. Depending on the response, the Ministry will continue to pursue the complaint until a satisfactory solution is reached.
Here is one example of an existing rule that applies to “third party disclosure”. A collection agency cannot provide information about you or your dealings with them to any third party. If a collection agency phoned you at home and your brother answered the phone and the collection agency told him to “have you call them back about your credit card debt”, this would be a third party disclosure violation.
An answering machine is also considered a third party. In many households many people have access to a single answering machine. Collection agencies are not permitted to leave details about your dealings with them on an answering machine. A co-worker is yet another example of a third-party.
If the fact of the matter is that you simply cannot pay your debt, there are steps you can take to ensure that the collection agency treats you fairly. With that said, the fastest way to get a collection agency off your back is by dealing with the debt. You can do this a number of ways: through a debt consolidation, through credit counselling or through government programs.
Coming up with a strategy to deal with your debt will put you on course to get the collection agencies out of your life and start working towards better financial help. For more information about collection agency harassment and what you can do to deal with debt that is in collections, visit http://www.debtcare.ca/
In extreme cases we have had clients tell us about collection agencies who have used the following aggressive collection tactics to force a dialog:
- Sending an abundance of mail with collection agency letterhead to the residence
- Sending mail to the consumer at work
- Calling the consumer at work and/or leaving messages with co-workers
- Contacting the consumers payroll department
- Leaving descriptive messages on the consumers voice mail
- Calling the consumer multiple times daily, even at night and on Sundays
Especially in Ontario, there are a number of protections in place that protect consumers from “over the top” collection agency tactics. The Ministry of Consumer Services regulates collection agencies and the Ministry of Consumer Services licenses all collectors in the Province of Ontario.
When a consumer has a problem with a collection agency they can file a complaint against the collector personally or against the collection agency. If the Ministry agrees that you have a valid complaint they will write to the collection agency requesting a response. Depending on the response, the Ministry will continue to pursue the complaint until a satisfactory solution is reached.
Here is one example of an existing rule that applies to “third party disclosure”. A collection agency cannot provide information about you or your dealings with them to any third party. If a collection agency phoned you at home and your brother answered the phone and the collection agency told him to “have you call them back about your credit card debt”, this would be a third party disclosure violation.
An answering machine is also considered a third party. In many households many people have access to a single answering machine. Collection agencies are not permitted to leave details about your dealings with them on an answering machine. A co-worker is yet another example of a third-party.
If the fact of the matter is that you simply cannot pay your debt, there are steps you can take to ensure that the collection agency treats you fairly. With that said, the fastest way to get a collection agency off your back is by dealing with the debt. You can do this a number of ways: through a debt consolidation, through credit counselling or through government programs.
Coming up with a strategy to deal with your debt will put you on course to get the collection agencies out of your life and start working towards better financial help. For more information about collection agency harassment and what you can do to deal with debt that is in collections, visit http://www.debtcare.ca/
Monday, 4 July 2011
Collection Agencies in Toronto Can be Stopped Using the Collection Agencies Act
Collection agencies represent companies who have a debt to collect. In most cases collection agencies represent creditors collecting on loans and other credit debt. That being said, many other companies will also employ the services of collection agencies. Utilities, payday loan providers, telecommunication companies, gyms and dentists are all examples of private companies that use collection agencies to collect debt on their behalf.
In heavily populated centres, such as Toronto, there are many collection agencies to be found. Nordon, Collect Corp., Total Debt Recovery, Financial Debt Recovery, and CBV Collections are just a few of the collection agencies that operate in Toronto. There are more than 20 collection agencies located in the GTA.
Collection agencies will employ any number of tactics to collect money from you. These could include frequent phone calls, at home or at work, writing to you at work, placing a “collection item” on your credit report or, with authorization, they may even file a claim against you in Small Claims Court on behalf of their client.
As scary as it seems, believe it or not, if you are having problems with a collection agency in Ontario there is legislation and there are government protections in place that mandate what a collection agency can and cannot do.
Here are a few tips:
You can go to the E-Laws website and search for “The Collection Agencies Act”. There you will find the legislation that regulates Collection Agency conduct and you can learn more about your rights.
You can visit the Ministry of Consumer Services website. The Ministry of Consumer Services (MCS) regulates collection agencies in Ontario and arbitrates complaints from the public. On the MCS website you can learn more about your rights and can even initiate a complaint online.
You can request your credit report online on the Equifax Website. If a collection agency has registered a collection item on your credit report, it will remain on your credit report for 3 years from the date it has been settled or paid in full. If the collection item resulted from a defaulted loan or credit card, the trade line registered by the creditor will remain in a defaulted status for 6 years from the date it is paid or settled in full.
There are a number of programs that are available through the Canadian Government specifically designed to stop collection agencies in their tracks. These programs depend on the individual’s personal and financial circumstances.
If the stress of dealing with collection agencies has become too much, you can use a financial consultant to get in between you and the collection agencies, providing you with financial relief. This is by far the most painless route. A financial consultant that specializes in negotiating with collection agencies will know exactly what to do. For more information about how to deal with collection agencies please visit http://www.debtcare.ca/
In heavily populated centres, such as Toronto, there are many collection agencies to be found. Nordon, Collect Corp., Total Debt Recovery, Financial Debt Recovery, and CBV Collections are just a few of the collection agencies that operate in Toronto. There are more than 20 collection agencies located in the GTA.
Collection agencies will employ any number of tactics to collect money from you. These could include frequent phone calls, at home or at work, writing to you at work, placing a “collection item” on your credit report or, with authorization, they may even file a claim against you in Small Claims Court on behalf of their client.
As scary as it seems, believe it or not, if you are having problems with a collection agency in Ontario there is legislation and there are government protections in place that mandate what a collection agency can and cannot do.
Here are a few tips:
You can go to the E-Laws website and search for “The Collection Agencies Act”. There you will find the legislation that regulates Collection Agency conduct and you can learn more about your rights.
You can visit the Ministry of Consumer Services website. The Ministry of Consumer Services (MCS) regulates collection agencies in Ontario and arbitrates complaints from the public. On the MCS website you can learn more about your rights and can even initiate a complaint online.
You can request your credit report online on the Equifax Website. If a collection agency has registered a collection item on your credit report, it will remain on your credit report for 3 years from the date it has been settled or paid in full. If the collection item resulted from a defaulted loan or credit card, the trade line registered by the creditor will remain in a defaulted status for 6 years from the date it is paid or settled in full.
There are a number of programs that are available through the Canadian Government specifically designed to stop collection agencies in their tracks. These programs depend on the individual’s personal and financial circumstances.
If the stress of dealing with collection agencies has become too much, you can use a financial consultant to get in between you and the collection agencies, providing you with financial relief. This is by far the most painless route. A financial consultant that specializes in negotiating with collection agencies will know exactly what to do. For more information about how to deal with collection agencies please visit http://www.debtcare.ca/
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