credit card debt

September 7th, 2006 by Questions

rather than filing bankruptcy – I have an individual negotiating with credit card companies on my behalf – reduced balances, interest rates etc. At what stage should I assume he’s not successful – I’m concerened that the credit card companies come after me and garnishee my wages or bank accounts – will there be any advance notice prior to this happening – i’d like to know – if so i will contact a trustee at that time. How long should i wait – I\’ve been just forwarding on to him the statments and collection letters – he’s been negotiating for 2 months approx.

i’ve seen organizations that promise to completely eliminate credit card debt – is this possible or even legal??

(I’m an Ontario resident)



One Response to “credit card debt”

, Barton Goth, GCO Inc. Bankruptcy Trustees said:

The problem with many of these types of consultants is that they are part of an unregulated industry and frequently there are consultants who make very substantial claims, but it has been my experience that few deliver. One thing to be wary about is if these creditors claim to be negotiating reduced balances and interest rates but cannot verify that the creditors will honor this if and when a settlement is negotiated. Unfortunately, I have seen many situations where the consultant took there fees, and once the debtor paid what he expected to be the last of the settlement the creditors would not honor the settlement and there was no mechanism to refute this as the consultant did not accomplish what he claimed. Therefore it is important to do your homework, look into the reputation of the consultant, if possible talk to others who have successfully used their services and ideally run the information provided by legal counsel.

As for whether or not the credit card companies can garnishee wages or bank accounts, it is possible, although normally they would have to give you notice of a court date. One concern that may arise is if they notify the “consultant” as he is acting as your representative. If they do this they may currently have the ability to do these things but you are simply unaware.

In terms of how long to wait, there is no hard and fast answer to this as it depends on whether the consultant is reputable or not, but it never hurts to review things with a licensed trustee in advance, just incase things go sideways. Most trustees will be happy to sit down with you to examine your situation free of charge, and this may be just what you need. One thing you may want to discuss with your trustee is the idea of a consumer proposal as this is the only court sanctioned way to negotiate a deal with your creditors, so it is done by trustee’s (who are regulated) and has legislative authority that is binding on the creditors (meaning once the proposal is accepted they are bound by it’s terms as long as you keep up with your commitments under the proposal).

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