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Credit Counselling vs
Bankruptcy or a Consumer Proposal
Mavis owed about $20,000.00 and could not pay. She went to a credit counsellor who sold her a bill of goods,
She was counseled to consolidate her debts and pay them off over a period of ten years. The reason? Bankruptcy would make her credit rating poor for 6 years and if she paid off her debts, the credit card companies would consider her a 'nice' person.
Here it is, 4 years later and Mavis still is deep in debt and cannot afford Christmas presents or car insurance. She has another 5 years of living like this, thanks to the "counseling".
If Mavis had declared bankruptcy she would have been free of all debts within a year or so.
By now, her credit rating would be restored. Credit card companies would be offering her new credit because she would owe nothing and has had a steady job for the last 6 years plus assets acquired for the period of 6 years. A terrific credit risk!
Mavis will not pay off her debts for ten long years. When they are finally paid, she would not be a good credit risk, as she would not have any assets. Her kids will not be able to afford college or university and she will continue in the cycle of poverty. .
If it will take you longer than 2-3 years to pay off your debts, declare bankruptcy. You may have to anyway if you lose your job. After 6 years all is forgotten, meanwhile you can save your money, increase assets and live like a normal human being.
The credit card companies will line up like the vultures they are to offer you new credit all over again.
Debt settlement services will charge you a fee to help you negotiate a plan to repay your debts.
Watch out for debt settlement companies that:
Always take the time to understand your contract.
Remember that some of these companies will charge a cancellation fee if you want to end your contract before the end of its term. They may also not refund any money that you paid them
POLICE: An investigation continues at Family Service Thames Valley
Police are investigating a possible fraud at a London credit "counselling" agency.
One staffer has been fired and about $39,000 has been returned to 51 clients and creditors by Family Service Thames Valley's credit-"counselling" division.
Executive director Warren Brooke, in a written statement, said: "discrepancies were uncovered" when the division -- the result of a 2004 merger with the former Credit "counselling" London -- began changing its accounting practices last fall.
The program is funded mainly through banks and other creditors.
At the time the "discrepancies" were found, agency employees managed a trust fund used to hold money from clients used to pay creditors.
"Client payments to us didn't get into the trust accounts," said Brooke, who apologized for any concerns or inconveniences.
"Our priority is to insure that all discrepancies are resolved as quickly as possible with minimal negative impact on clients and creditors," he said. "Funds have been returned to all clients and creditors as the discrepancies have been verified."
FROM THE LONDON FREE PRESS
By JOE BELANGER Tue, June 24, 2009
This is not legal advice, it is information
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