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


Average Unsecured Debt $56,545

Senior Debtor (60+)

Unsecured Debt






Payday Loan


Easy Instalment Loan


Lone Parent Debtor

Unsecured Debt






Payday Loan


Easy Instalment Loan


Student Debtor

Unsecured Debt


Student Debt


Male (Student Debt)

40% ($12,431)

Female (Student Debt)

60% ($14,748)

Payday Loan


Easy Instalment Loan


Payday Loans 

Average Payday Debt


Number Loans


Average Loan Size


Easy Instalment Loans  

Average Total Debt


Average Loan Size



More data available at:

Additional graphs and images available here:

SOURCE Hoyes, Michalos & Associates Inc.

For further information: Douglas Hoyes, CPA, Trustee in Bankruptcy, doug@hoyes.com; Ted Michalos, CPA, Trustee in Bankruptcy, ted@hoyes.com; 1-866-747-0660


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