- \n
- Their \u201cexpert debt negotiators\u201d would help me \u201cget completely out of debt in 12 to 48 months\u201d if I agreed to go on their Debt Settlement Program. I would make monthly payments to a new account they would setup, and once there was enough money in the account, they would begin to offer settlements to my various creditors.
![\"Debt](\"https:\/\/nomoredebts.org\/wp-content\/uploads\/2021\/01\/Discover_Special_small.jpg\" "\\"Debt")
<\/li>\n - \u201cThe worst case scenario\u201d would be that I would only have to repay 45% of my debt\u2014even if I was not behind on my payments.<\/li>\n
- Sandy claimed that they helped an NFL football player who earned $500,000 a year settle his credit card debts for only 18% of the amount he owed.<\/li>\n
- I asked why the banks would agree to this since I wasn\u2019t late on any of my payments. Here are Sandy\u2019s answers:\n
- \n
- Her company\u2019s expert “debt negotiators” are \u201cpretty much on a first name basis with all the credit card companies and major banks\u201d and they “will” settle all my debts for at least forty-five cents on the dollar.<\/li>\n
- Since I have carried a credit card balance for some time, “most of the money” I am paying on my credit cards every month is “just paying off interest.” So “the credit card companies really don\u2019t lose anything.”<\/li>\n
- Sandy said that she had previously worked for a major credit card company for 13 years so she “knows” how the system works.<\/li>\n
- They claim to have a “100% success rate.”<\/li>\n<\/ul>\n<\/li>\n
- Sandy told me that I wouldn\u2019t qualify for bankruptcy even though she didn\u2019t ask me one question about my income or my assets which are really important factors when deciding what to do about debt. All she asked about was the amount of credit card debt that I had.<\/li>\n
- This \u201cprogram has been around for 35 years.\u201d Their company \u201chas been doing this for 20 years,\u201d and they\u2019ve been operating in Canada for 6 months out of Toronto (even though my phone call was handled through their Florida call centre).<\/li>\n
- I don\u2019t have to worry about collectors calling me while I\u2019m on their program because they have a \u201ccease and desist letter\u201d that I can send to my creditors to stop all collection calls.<\/li>\n
- Sandy claimed that they have \u201cthousands\u201d of actual \u201csuccess stories\u201d on their website.<\/li>\n<\/ul>\n
What they didn\u2019t tell me<\/h2>\n
- \n
- They are not licensed to conduct business in my province. I called my provincial licensing body to find out (all provinces require debt settlement companies to be licensed as \u201cDebt Collectors\u201d or \u201cDebt Poolers\u201d).<\/li>\n
- They have an F rating with the Better Business Bureau (BBB). The BBB assigns businesses ratings on a scale of A to F, and F doesn\u2019t mean \u201cfabulous\u201d! The Better Business Bureau has since warned people not to deal with them.
![\"Make](\"https:\/\/nomoredebts.org\/wp-content\/uploads\/2021\/01\/Discover_through_Holes_small.jpg\" "\\"When")
<\/li>\n - I did a Google search for this company, and they appear to be the subject of many lawsuits.<\/li>\n
- Their success rate is most likely less than 10%. – Government Report<\/a><\/li>\n
- 65% of people who pay fees to these kinds of for-profit debt settlement companies leave their programs without ever receiving a settlement. – Government Report<\/a><\/li>\n
- The amount of money that people pay in fees to these companies almost equals the amount of money that they save. However, this is before creditor late fees, penalties and interest are added in (these can often double or triple a debt by the time a settlement is negotiated). So at the end of the day it seems fair to say that the vast majority of people who deal with these companies do not save any money and are often left worse off in the end. – Source<\/a><\/li>\n
- This company’s business practice of charging fees before providing a service (a successful debt settlement) is now illegal in their home country.<\/li>\n
- Creditors consider settlements on a case-by-case basis and only people who are in extreme circumstances, often with very bleak future income prospects or devastating medical conditions can hope to have a settlement offer of 45% (or less) accepted by their creditors.<\/li>\n
- For a creditor to accept less than full payment on a debt there must be a good reason. Circumstances where it can make sense to settle debts vary but can include illness or job loss.<\/li>\n
- If you stop paying your creditors and stash all your money in some \u201cnew account\u201d creditors will hand your debt over to collection agencies who will call you persistently. It is possible to stop collection calls, but that doesn\u2019t stop a creditor\u2019s collection activities. Money in an account with your name on it may be used to pay your debt (if your account and your debt are with the same financial institution). Creditors can take you to court and seek a judgment against you, and once they get a judgment, they can then put a lien on your house or even garnish your wages.<\/li>\n
- No one can tell you that you don\u2019t qualify for bankruptcy if they don\u2019t know what your income is. A qualified Credit Counsellor or Trustee would look at your whole financial situation to see if bankruptcy is a viable option for you.<\/li>\n
- This debt settlement company doesn\u2019t have \u201cthousands\u201d of success stories on their website. They have dozens\u2014maybe even a hundred\u2014individual debt settlement agreements, but not thousands of “success stories.”<\/li>\n
- Sandy never brought up the subject of me taking responsibility for my financial situation. She didn’t appear to be the least bit concerned about how I accumulated my debt. For all she knew I could have racked up all my debt in Las Vegas, yet she was essentially encouraging me to take advantage of the companies who had lent me the money. The fact that I can afford my payments and have never been late on any of my payments didn’t matter.<\/li>\n
- There are always ways to try to beat the system, but they usually don\u2019t work. This is another good example of the old saying, \u201cthere is no such thing as a free lunch.\u201d<\/li>\n<\/ul>\n
Here are some of the factors that the Credit Counselling Society considers when we help clients settle their debts:<\/h2>\n
- \n
- What is the reason for settling the debts? What has happened to make paying the debts off in full so difficult?<\/li>\n
- Offering a settlement requires a lump sum of money. How much money do you have available for the settlement offer?<\/li>\n
- Where are the funds coming from (friends or family, refinancing, inheritance or RRSPs)?<\/li>\n
- Are you aware of the impact on your credit rating if you settle your debts?<\/li>\n
- What will you do if only some of your creditors accept the settlement offer?<\/li>\n<\/ul>\n
We conduct a full financial analysis and look at the whole picture before we commit to helping a client with a settlement offer.<\/strong><\/p>\n
I am not trying to pick on Sandy or vilify the organization that she works for (that is one reason why I haven\u2019t named them). However, based on my phone call with Sandy and what we see happening south of the border, we are very concerned about how these American debt settlement companies are doing business in Canada and how this may adversely affect the lives of thousands of Canadians.<\/p>\n
If you or someone you know needs help with their debts, feel free to contact us<\/a>. We are here to help.<\/p>\nLast Updated on May 5, 2025 \n
Related Blog Posts<\/h3>\n
- \n
- Debt Settlement Companies: The Good, The Bad and The Ugly<\/a><\/li>\n
- Ads for Debt Settlement Companies Sound Great. Why Not Go for It?<\/a><\/li>\n<\/ul>\n
Learn More<\/h3>\n
- \n
- Is a Debt Settlement Program the Best Option for Me?<\/a><\/li>\n
- How a Debt Settlement Program Can Hurt You<\/a><\/li>\n
- Debt Settlement Tips: Avoid these debt settlement company tricks<\/a><\/li>\n
- Overview of our Debt Settlement Program<\/a><\/li>\n
- How We Approach Debt Settlements: How our debt settlement services work<\/a><\/li>\n<\/ul>\n
<\/p>\n
- How a Debt Settlement Program Can Hurt You<\/a><\/li>\n
- Ads for Debt Settlement Companies Sound Great. Why Not Go for It?<\/a><\/li>\n<\/ul>\n
- Debt Settlement Companies: The Good, The Bad and The Ugly<\/a><\/li>\n
- 65% of people who pay fees to these kinds of for-profit debt settlement companies leave their programs without ever receiving a settlement. – Government Report<\/a><\/li>\n