Will New Ontario Debt Settlement Laws Protect Consumers?

KITCHENER, ON, June 8, 2015 /CNW/ - On July 1, 2015 provisions of the newly renamed Collection and Debt Settlement Services Act become law in Ontario. 

Prior to this new law, debt settlement companies could charge significant up-front fees without ever negotiating with the debtor's creditors, and as a result many Ontario consumers paid significant fees and received no benefit.  Under the new laws fees will be capped, and up-front fees are prohibited.  Will this help consumers?

"I believe a consumer proposal, legislated by federal law and legally binding on all unsecured creditors, is much more powerful than an informal debt settlement," said Douglas Hoyes, a trustee with Hoyes, Michalos & Associates Inc. "Consumer proposals offer instant legal protection from creditors, a protection which is simply not available in a debt settlement" says Hoyes.

"Creditors are much more willing to consider a reasonable consumer proposal because they know if they don't the debtor will likely file bankruptcy" says Ted Michalos, a trustee with Hoyes, Michalos & Associates Inc.  "That's why most consumers prefer to deal with highly educated and experienced trustees, as compared to debt settlement salespeople who have no educational requirements."

"The new laws may help, but I believe the most significant benefit of the new legislation is that it will increase awareness of all options available to consumers to deal with their debt" concludes Hoyes.

An unintended consequence of the new law is that collection agencies can now offer debt settlements, which may put them in a conflict of interest position if they are collecting on behalf of many creditors.

Full details, including links to the new legislation, are available at http://www.hoyes.com/blog/will-the-new-debt-settlement-law-protect-consumers/

About Hoyes, Michalos & Associates, Inc.

Hoyes, Michalos & Associates Inc., a consumer proposal and trustee in bankruptcy firm with offices throughout Ontario, helps people in financial difficulty.  Further information is available at www.hoyes.com

KEY SURVEY FINDINGS- JOE DEBTOR

Average Unsecured Debt $56,545
Senior Debtor (60+)
	Unsecured Debt		$69,031
	Male		58%
	Female		42%
	Payday Loan		$3,693
	Easy Instalment Loan		$3,749
Lone Parent Debtor
	Unsecured Debt		$52,928
	Male		25%
	Female		75%
	Payday Loan		$2,638
	Easy Instalment Loan		$3,412
Student Debtor
	Unsecured Debt		$48,414
	Student Debt		$13,818
	Male (Student Debt)		40% ($12,431)
	Female (Student Debt)		60% ($14,748)
	Payday Loan		$2,461
	Easy Instalment Loan		$2,894
Payday Loans
	Average Payday Debt		$2,749
	Number Loans		3.5
	Average Loan Size		$794
Easy Instalment Loans
	Average Total Debt		$3,608
	Average Loan Size		$3,346

More data available at:
http://www.hoyes.com/press/joe-debtor/

Additional graphs and images available here:
http://www.hoyes.com/press/joe-debtor/media-graphics/

SOURCE Hoyes, Michalos & Associates Inc.

Douglas Hoyes, CPA, Trustee in Bankruptcy, [email protected]; Ted Michalos, CPA, Trustee in Bankruptcy, [email protected]; 1-866-747-0660