Pleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.caNewOntarioLawWillCreateFrankensteinCategoryofDebtSettlementServiceProvider OntarioGovernmentReleasesaNewDebtSettlementLawfor2015TheOntarioGovernmenthasgivenlifetoanewcreature,ahybridcategoryofdebtsettlementprovideronelegallyentitledtoofferdebtsettlementservicesandtoprovidethirdpartycollectionservices.Thiscreation,whichwillinthesamebreathactinthebestinterestsofbothcreditorsanddebtors,isdestinedtoleaveatrailoftoxicconflictsofinterestandunhappyconsumers.WearewitnessingtheemergenceofanewFrankensteincategoryofdebtsettlementprovider!MarkSilverthorn,author,andformercollectionlawyerandcollectionindustryinsiderDebtsettlementprovidersincludeindividualsorfirmswho,onbehalfofaconsumer,negotiatesettlementswiththeconsumerscreditors,orthecreditorsauthorizedrepresentativeusuallyacollectionagencywherethecreditoracceptsaonetimelumpsumpaymentforlessthanonehundredpercentoftheoutstandingbalanceassettlementinfull.OverthepastfiveyearsitwouldhavebeendifficultforanOntarioresidenttogoontheinternetorlistentotheradiowithoutbeingexposedtoanadforadebtsettlementprovider.Atonepointintime,onesuchdebtsettlementfirm,CambridgeLifeSolutions,washeavilymarketingitsservicesonbothradioandtelevisiontoOntarioresidents.InJanuaryof2015itbecamepublicknowledgethatthelawregulatingdebtsettlementservicesinOntariowouldchangedramaticallyonJuly1,2015,undertheOntarioCollectionandDebtSettlementServicesActanditsRegulations.AnyfurtherreferencesinthisreporttotheActaretothislaw.InFebruaryof2015,inpreparationforJuly1,2015,andthenewregulatoryregimefordebtsettlementserviceproviders,anumberoffirmsarereevaluatingthemixofservicesthattheycurrentlyoffertothepublic.Thesefirmsincludesomeofthefollowing:ExistingfirmsprovidingtraditionaldebtsettlementservicestoOntarioresidentsSmallOntariobasedcollectionagenciesPleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.caSmallOntariobasedlawfirmsthatdonotcurrentlyoffertraditionaldebtsettlementservicesOntariobasedfirmsofbankruptcytrusteesFurthermore,anumberoffirmsincludingsomesmallcollectionagenciesandlawfirmscarryingonbusinessinOntario,andsomeOntariobasedbankruptcytrusteesarecurrentlyexploringtheprospectofofferingsometypeofdebtsettlementservicesafterJuly1,2015.IwilladdressthistopicinmoredetailinthelastsectionofthisreporttitledWhoWillBeProvidingDebtSettlementServicesinOntariointheFuture?InthisreportIamgoingtoaddressthefollowingfourissues:1.TheOntarioGovernmentsfailuretoadequatelyenforceexistinglawsregulatingtheprovidersofdebtsettlementservicestoOntarioresidents2.TheneedforreformstothelawinOntarioconcerningtheregulationofdebtsettlementservices3.Thekeyprovisionsinthenewlawregulatingdebtsettlementserviceproviders4.WhowillprovidedebtsettlementservicesinOntariointhefuture?TheOntarioGovernmenthasfailedtoenforcetheexistinglawregulatingdebtsettlementserviceprovidersThenewlawregulatingdebtsettlementfirmsinOntariocomesintoeffectonJuly1,2015,anditwillhaveadramaticimpactontheprovisionofdebtsettlementservices.Whatmanypeopleforget,however,isthattheOntarioGovernmenthashadlawsonthebooksformanyyearsregulatingfirmsprovidingdebtsettlementservicesandtheOntarioGovernmenthasnotdistinguisheditselfenforcingtheselaws.UndertheOntarioCollectionAgenciesAct,nowknownastheCollectionandDebtSettlementServicesAct,anyfirmnegotiatingsettlementswithcreditors,ortheirauthorizedagents,onbehalfofanOntarioresident,hadtoholdavalidOntariocollectionagencylicenseandcomplywithmanyoftheregulatoryrequirementsthatapplytoacollectionagencyincludingasuretybondrequirement,licensingofbranchoffices,aswellaslicensingsomeoftheiremployeesascollectors.Today,morethanfiftypercentofthefirmsofferingdebtsettlementservicestoOntarioresidentsdonotsatisfyOntarioslicensingrequirements,and,therefore,areoperatingillegallyinOntarioasanunlicensedcollectionagency,andinsomecasestheOntarioGovernmentisawareoftheexistenceofthesefirmsandforwhateverreason,noactionofanyconsequencehasbeentakenagainstthesefirms.NimaTaheri,CEO,Markham,OntariobasedComplianceFirstFinancialInmanyinstancestheseunlicensedprovidersofdebtsettlementserviceshavebeenreportedtotheOntarioGovernmentand,tothebestofmyknowledge,littleornoactionhasbeentakenagainsttheseillegalprovidersofdebtsettlementservices.TheseunlicenseddebtsettlementserviceprovidersarenotlimitedtoU.S.baseddebtsettlementfirms.OneemployeeatadebtsettlementfirmadvisedmethathePleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.cahasreportedseveralmortgagebrokerstotheOntarioGovernmentforoperatingasunlicenseddebtsettlementserviceprovidersandtheOntarioGovernmenthastakennoactioninresponsetothecomplaint.NimaTaheri,CEOofComplianceFirstFinancial,adebtsettlementfirmbasedinMarkham,OntarioreportsthatmembersofseniormanagementfromanumberoflicenseddebtsettlementfirmshaveprovidedtheOntarioGovernmentwithlistsofnamesoffirmsprovidingdebtsettlementservicesillegallyinOntarioandnoactionwouldappeartohavebeentakenagainstthefirmscontraveningthelaw.ReformstoOntariosexistingdebtsettlementregulatoryregimewererequiredTherehavebeennumerouscriticsofthedebtsettlementindustryinCanada.Manyofthecriticismsoftheindustryarevalid.Somedebtsettlementfirmsusequestionablemarketingpracticesandsomedonotadequatelyservicetheirclients.Someofthecriticismsofthedebtsettlementindustry,however,arepartiallymotivatedbyselfinterestfromthosecompetingforrevenueswithdebtsettlementfirms.Whatpeopleoftenforget,however,isthatinmanyinstances,aconsumercanontheirown,negotiateaverygeneroussettlementwithacreditorbymakingalumpsumpaymentforsubstantiallylessthanonehundredpercentofthecurrentoutstandingbalance.TheKeyProvisionsofOntariosNewDebtSettlementRegulatoryRegime1.TheActwillregulatesomefirmsnegotiatingsettlementsinvolvinginstallmentpaymentsaswellaslumpsumpaymentsOneoftheinterestingaspectstothenewActisnotonlywhatactivityisregulatedbutalsowhoseactivitiesareregulated.TheActregulatesnotonlywhatwewouldnormallythinkofastraditionaldebtsettlementservicesbutalsoservicesthatwewouldnormallyassociatewiththatofcreditcounsellingagencies.Firstly,theActregulatestheconductofanyone,otherthanthosespecificallyexemptedfromtheAct,whoresolvesoutstandingdebtsonbehalfofanotherbywayofinstallmentpayments.Ifadebtorisgoingtoresolveadebtbywayofinstallmentpaymentsthentypicallythecreditorwillinsistonrepaymentof100percentoftheoutstandingbalance.Traditionally,theonlyorganizationswhichhaverepresentedconsumersrepayingonehundredpercentoftheiroutstandingdebthasbeencreditcounsellingagencies.Therearetwokindsofcreditcounsellingagencies,nonprofitcreditcounsellingagenciesandforprofitcreditcounsellingagencies.ItwouldappearthatatsomefuturedatenonprofitcreditcounsellingagencieswillbecomeexemptfromtheAct.Thismeansthat,asapracticalmatter,atsomefuturedatetheonlyentitiesthatcouldpotentiallybeaffectedbytheprovisionsoftheActconcerninginstallmentpaymentsareforprofitcreditcounsellingagencies.TheActalsoregulatestheactivitiesofanyone,exceptthoseentitiesexemptfromtheAct,whonegotiateaonetimelumpsumsettlementonbehalfofanother.Thisiswhathastraditionallybeendescribedasdebtsettlement.Anyfirmwhichhasbeenor,inthefuture,willbeengagedinprovidingwhatwecharacterizeasdebtsettlementserviceswillbesubjecttothenewAct.Thereare,however,anumberofimportantexemptionsundertheAct.ThefollowingentitiesareexemptfromtheAct:Pleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.caLawyersengagedintheprivatepracticeoflawBankruptcytrusteesNonprofitcreditcounsellingagencies(areexpectedtoobtainanexemptionatsomefuturedate)Theseexemptionsareincrediblyimportantbecausethereisapossibilitythatasearlyas2017thatasubstantialpercentageofallthedebtsettlementworkdoneinOntariopotentiallythemajorityoftheworkwillbedonebyentitieswhoareexemptfromtheAct.2.FeesfortraditionaldebtsettlementserviceprovidersaredramaticallyreducedUndertheActanyfirmprovidingdebtsettlementservices,wherethedebtormakesaseriesofinstallmentpayments,canchargeanamountequalto15percentofeachpayment,plusaonetimesetupfeeof$50peroutstandingaccount.Theremainderofthissectiondealswiththesituationwherethedebtsettlementproviderisnegotiatingsettlementswherethedebtormakesaonetimelumpsumsettlementtoresolveanoutstandingaccount.InOntario,whereanOntarioresidententersintoadebtsettlementagreementonorafterJuly1,2015,thenthemaximumfeethatthedebtsettlementprovidercanlegallychargeistenpercentoftheamountofthedebt.ThismeansthatfirmsofferingtraditionaldebtsettlementserviceswillearnlessfeesfromclientsonanydebtsettlementcontractssignedonorafterJuly1,2015,andthereforetheywillbelessprofitablebusinesses.AsimpleexamplewillhelpillustratethefeesunderthenewregulatoryregimeJoanSmithhasoneoutstandingcreditcarddebtwithanoutstandingbalanceof$10,000.ShesignsadebtsettlementagreementwithadebtsettlementfirmonJuly1,2015.ThemaximumfeethatthedebtsettlementfirmcanchargeJoanSmithis$1,000,or10percentofher$10,000debt.Itisimportanttonotethat,priortoJuly1,2015,firmsprovidingdebtsettlementservicesinOntariowereusingdifferentfeemodelsfortheirservices.Thelesscommonfeemodelisthecontingencyfeemodel.Underthisfeemodel,adebtsettlementfirmonlyearnsafeeequaltoapercentageoftheclientssavingsunderasettlement,ifandwhen,anoutstandingaccountisactuallysettledandalumpsumpaymentismadetothecreditor.Themorecommonfeemodelisthepercentageoftotalenrolleddebtfeemodel.Underthisfeemodel,adebtsettlementfirmchargesaclientfeesequaltoafixedpercentagetypically15percentofthetotaldebttheconsumerincludesinthedebtsettlementagreement,plusa$50monthlyservicefeepayablefromthedateadebtsettlementcontractissigneduntilsuchtimethatthedebtsettlementcontractends.InourexamplewithJoanSmith,ifshesignedacontractfordebtsettlementservicewithadebtsettlementservicesproviderandthefeeschargedwere15percentoftheenrolled$10,000debtandsheaccumulatedsettlementfundsoveraperiodof18months,thenshewouldhavepaidatotalof$2,400infees.Incontrast,whatifJoanSmithhadsignedadebtsettlementcontractwithadebtsettlementfirmthatprovideddebtsettlementservicesata25percentcontingencyfeethedebtsettlementfirmwouldchargeafeeequalto25percentofthemoniesaconsumersavedwhenasettlementactuallytookPleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.caplace?IfthedebtsettlementprovidernegotiatedasettlementofJoanSmiths$10,000creditcarddebtfor$2,500thenthedebtsettlementproviderwouldearnacontingencyfeeequalto$1,875or25percentoftheclients$7,500insavings.Fromtheconsumersperspective,thecontingencyfeemodelismuchmoreattractiveprovidedthecontingencyfeechargedbythedebtsettlementproviderisnotexcessive.Underthecontingencyfeemodeltheconsumerdoesnotpayapennytothedebtsettlementfirmunlessasettlementisactuallypaidout.Unfortunately,asignificantpercentageofindividualswhosignacontractwithadebtsettlementproviderareunabletosuccessfullysettletheirdebtstypicallybecauseofaninabilitytoraisethenecessarysettlementfundsorbecausecreditorswhosedebtsareincludedinthedebtsettlementagreementsuethem.AccordingtoBoazAvni,PresidentoftheTorontobaseddebtsettlementfirm,CanadaDebtSettlements,thenewlaweffectiveJuly1,2015,willhaveamoredramaticfinancialimpactforfirmsthathavehistoricallybeenchargingfeesasapercentageoftotalenrolleddebtcomparedwiththosefirmsthathaveonlychargedaclientacontingencyfeeif,andwhen,asettlementisactuallypaidout.3.RestrictionsastowhenatraditionaldebtsettlementproviderisentitledtoearnfeesOnJuly1,2015,thosedebtsettlementserviceproviderstypicallyforprofitcreditcounsellingagenciesarrangingsettlementscomprisedofaseriesofinstallmentpaymentswillbeentitledtoearntheir$50setupfeeforeachoutstandingaccountatanytime,andtheywillbeentitledtoearnanamountequalto15percentofadebtorsmonthlycontributionundertheirDebtManagementPlanatthetimeaninstallmentpaymentismade.Theremainderofthissectionisgoingtoaddressatwhatpointintimedoesafirmnegotiatinglumpsumsettlementsbecomeentitledtoearnitsfees.AsofJuly1,2015,whenanOntarioresidentsignsacontractfordebtsettlementservicesthen,anydebtsettlementserviceproviderexceptthoseexemptfromtheActisnotentitledtochargeapennyinfeesuntilsuchtimethatasettlementhasactuallybeenpaidout.ThisprovisionisgoingtomakeitverydifficultforanyfirmtobefinanciallyviableprovidingdebtsettlementservicestoOntarioresidentsunlessithassubstantialrevenuestreamsfromothersources.LaterinthisreportIwillcanvassthetopicofhowsomesmallOntariobasedcollectionagenciesmightfinditquiteprofitabletoadddebtsettlementservicesasasidelinetotheirprimarybusinessofprovidingcollectionservices.ThefactthatthenewlawinOntarionotonlycapsthefeesthattraditionaldebtsettlementserviceproviderscanchargebutalsodeferswhenthosefeescanbeearnedwillmakeitverydifficultforadebtsettlementprovidertobefinanciallyviableunlessitisexemptfromtheOntarioCollectionandDebtSettlementServicesActortheprovisionofdebtsettlementservicesisonlyasecondarysourceofrevenuesforthefirm.4.ProvidersofdebtsettlementservicesmustcomplywithonerouslicensingregimeTheActdoesexemptlawyersengagedinthepracticeoflawandlicensedbankruptcytrusteesfromanyandallprovisionsoftheAct.Therefore,anylawfirmorlicensedbankruptcytrusteeswishingtoofferdebtsettlementservicesarenotsubjecttoanyoftherestrictionscontainedintheActortheRegulations.Anylawyerorbankruptcytrustee,however,whodoesprovidedebtsettlementservicestoanOntarioresidentmustcomplywithanyoftherelevantrulesofprofessionalconductthatapplytoaPleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.calawyerlicensedtopracticelawinOntarioortoalicensedbankruptcytrustee.Asnotedearlier,itislikelythatnonprofitcreditcounsellingagencieswillbecomeexemptundertheActatsomefuturedate.AnyfirmwhichisnotexemptfromtheActseekingtolegallyprovidedebtsettlementservicestoOntarioresidentsmustcomplywiththecostlyandonerouslicensingandregulatoryrequirementsimposedontheholderofanOntariocollectionagencylicense.Theserequirementsincludethefollowing:ExaminationrequirementMustmaintainapermanentplaceofbusinesswithintheprovinceopentothepublicduringbusinesshoursSuretybondrequirementTrustaccountrequirementFinancialdisclosurerequirementsRecordkeepingrequirementsLicensingrequirementsforcollectionagencies,branchoffices,andindividualcollectorsTheserequirementsactasasubstantialbarriertoentrytoanyfirmthatwishestoprovidedebtsettlementservicestoOntarioresidents.AsapracticalmatterthisprovisionwilldiscouragedebtsettlementfirmsoperatinginotherjurisdictionsfromprovidingdebtsettlementservicesinOntario.ItwillalsodiscourageindividualslivinginOntariowhowouldliketoprovidedebtsettlementserviceswhileworkingfromhomefromprovidingdebtsettlementservicestoOntarioresidents.5.RestrictionsregardingmisleadingandpredatorymarketingpracticesThenewlawthatcomesintoeffectonJuly1,2015,containsahostofmeasuresdesignedtoreduceorpreventpredatoryandmisleadingmarketingpracticesbydebtsettlementserviceproviderssubjecttotheAct.6.CreationofdebtsettlementclientbillofrightsOneofthemostpositiveaspectsofthenewActisthatitcreatesaseriesofprovisionswhichIwillcollectivelyrefertoasadebtsettlementclientbillofrights.7.SelfhelpremediesfordebtsettlementcontractclientsThenewlawinOntariothatcomesintoeffectonJuly1,2015,doescontainanumberofselfhelpremediesthatwillenableapersontoobtainreliefincourtwhereafirmofferingdebtsettlementserviceshasviolatedtheAct.8.OntariocollectionagencylicenseholdercanprovidebothdebtsettlementandcollectionservicesAtleastoneaspectofthenewOntariolaw,however,isclearlynotinthepublicinterest!OneofthemostworrisomeaspectsofthenewlawisthatanyfirmlicensedasacollectionagencyinOntarioaPleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.carequirementforbothcollectionagenciesanddebtsettlementserviceproviderswillbelegallyentitledtoprovidebothcollectionagencyservicesanddebtsettlementservices!Thisisgoingtocreateanewtypeofhybridfirm,onewhichprovidesnotonlycollectionagencyservicesbutalsodebtsettlementservicesinOntario.Itisinevitablethatthesenewhybridserviceproviders,workingonbothsidesofthecreditordebtorfencewillfaceawkwardconflictsofinterest.Consequently,onecouldsaythattheOntarioGovernmenthascreatedanewFrankensteincategoryofdebtsettlementserviceprovider!ItisinterestingtocomparethesituationinOntariowiththelawinotherprovinces.WhileresearchingthisreportIspokewithDarrenThomas,theseniorcivilservantinAlbertaresponsibleforregulatingcollectionagenciesandheadvisedmethatAlbertalawprohibitsafirmfromofferingbothdebtsettlementservicesandthirdpartycollectionservices.Pleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.caWhoWillbeProvidingDebtSettlementServicesinOntariointheFuture?1.Whichentitieswillbelegallyentitledtoprovidedebtsettlementservices?Asnotedearlierinthisreport,therearetwodifferentactivitieswhichareregulatedundertheActThosenegotiatingsettlementswithcreditorswherethedebtorismakingaseriesofinstallmentpaymentsThosenegotiatingsettlementswithcreditorswherethedebtorismakingaonetimelumpsumpaymentThefollowingchartsummarizesthoseentitiesthatwillbelegallyentitledtoprovidedebtsettlementservicesafterJuly1,2015,eitherastheholderofacollectionagencylicenseissuedundertheOntarioCollectionandDebtSettlementServicesAct,orasanentityexemptfromtheAct.Pleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.ca2.Whatwillthedebtsettlementindustrylooklikein2017?IanticipatetenpotentiallysignificantdevelopmentsintheOntariodebtsettlementindustrybetweenJuly1,2015,andJanuary1,2017:i.Therewillbefew,ifany,forprofitcreditcounsellingagenciesoperatinginOntarioAtsomefuturedateitisexpectedthatthosecreditcounsellingagencieswhichhavenonprofitstatuswillbecomeexemptfromtheonerousregulatoryregimeimposedundertheAct.IforeseethatforprofitcreditcounsellingagencieswillfindcompliancewiththeonerousregulatoryregimeimposedundertheActtobepunitive.Consequently,Ipredictthattherewillbefew,ifany,forprofitcreditcounsellingagenciesoperatinginOntarioby2017.ii.Therewillbefew,ifany,firmslicensedasacollectionagencyundertheAct,negotiatinglumpsumsettlementswherethisactivityisthefirmsprimarybusinessThenewActandRegulation74enactedpursuanttoitcreatemajorheadachesfortraditionaldebtsettlementserviceprovidersnegotiatinglumpsumsettlementswithcreditorsonbehalfofclients.Oneofthekeyproblemsrelatestofees.Feesarenotonlycappedatanamountequalto10percentofthedollarvalueofadebtatthedateacontractissignedbutalsothedebtsettlementprovidercannotearnanyfeesuntilsuchtimethatasettlementisactuallypaidout.WithinafewmonthsofJuly1,2015,itmightbedifficulttofindmorethanahandfuloffirmslicensedasanOntariocollectionagencywhosesolesourceofrevenuesisnegotiatinglumpsumsettlementswithcreditorsonbehalfofdebtors.iii.SomeexistingdebtsettlementfirmsmightofferthirdpartycollectionservicesItwouldalsoappearthatsomeexistingOntariobaseddebtsettlementfirmsarecontemplatingexpandingtheservicesthattheycurrentlyoffertoincludethirdpartycollections.WhileresearchingthisreportIspokewithNimaTaheri,CEO,ofMarkham,OntariobasedComplianceFirstFinancialCorp.,adebtsettlementfirmthatworksprimarilywithmortgagebrokers.Nimahasconfirmedthis,AnumberofOntariodebtsettlementfirmsareactivelyinvestigatingthepossibilityofofferingcollectionservicesatsomepointin2015.iv.SomesmalllawfirmsinOntariowillbeginofferingdebtsettlementservicesItwouldseemalmostinevitablethatsomelawfirmsinOntariowillbeginofferingsomeformoftraditionaldebtsettlementservicestoOntarioresidentsin2015.AlawfirmoperatinginOntario,exemptundertheAct,notonlycanchargehigherfeesforprovidingtraditionaldebtsettlementservicesbutalsoitwillbelegallyentitledtoearnfeesearliercomparedwithadebtsettlementfirmwhichislicensedasacollectionagencyundertheAct.AfterJuly1,2015,anylawfirmofferingtraditionaldebtsettlementserviceswillhaveahugecompetitiveadvantageoveranydebtsettlementfirmlicensedasacollectionagencyundertheOntarioCollectionandDebtSettlementServicesAct.v.SomeexistingdebtsettlementfirmswillchangetheirbusinessmodelandoffertheirservicesaspartofalawfirmandnotasbeinglicensedasacollectionagencyundertheActPleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.caIanticipatethatsomefirmsthathavebeenoperatingastraditionaldebtsettlementfirmsinOntarioforthepastseveralyearswillstopsolicitingnewclients,butinsteadbeginsolicitingnewclientswhileworkingastheinhousedebtsettlementdepartmentatanOntariobasedlawfirm.ThischangewillenablethedebtsettlementserviceprovidernotonlytoavoidthecostlyandonerousregulatoryregimeundertheActbutalsotochargehigherfeesforverysimilarservices.vi.SomesmallcollectionagenciesoperatinginOntariowillofferdebtsettlementservicesasalineofbusinesssecondarytotheirprimarybusinessofbeingacollectionagencyItwouldappearthatanumberofOntariobasedcollectionagenciesparticularlysmalleragenciesareconsideringofferingdebtsettlementservicesinadditiontotheirprimarybusinessofthirdpartycollections.BlairDeMarcoWettlaufer,theManagingPartnerofKingstonDataandCredit,acollectionagencywithofficesinCambridge,Brantford,andPointeClaire,Quebec,confirmsthis.Fromacostandregulatoryperspective,therearesignificantbarrierstoentrytobeingadebtsettlementserviceproviderinOntariobecauseitisnecessarytosatisfytheprovinceshighlystructuredlicensingrequirementsforcollectionagenciesapermanentplaceofbusiness,atrustaccount,andtherequirementnottochargeafeeuntilasettlementisactuallypaid.AnOntariobasedcollectionagencythatwantstoofferdebtsettlementserviceshasvirtuallynoadditionaloverheadcostsbyaddingthisbusinesslinetoitsexistingsuiteofservices,withapreexistingcallcentretonegotiateontheconsumersbehalf,experiencemanagingtrustmonies,aswellasbeingpreequippedwithmanycreditorcontactsandrelationships.BlairDeMarcoWettlaufter,ManagingPartnerofKingstonDataandCreditvii.SomeOntariobasedbankruptcytrusteesmightnegotiatelumpsumsettlementsonbehalfofOntarioresidentsItispossiblethat,afterJuly1,2015,someOntariobasedbankruptcytrusteesmightnegotiatelumpsumsettlementswithcreditorsonbehalfofconsumers.Thisscenariomightarisewhereaconsumerisnoteligibleforaconsumerproposalorpersonalbankruptcybecausetheyarenotinsolventunderfederalbankruptcylawsomethingthatitquitecommonwhereconsumershavesignificantequityintheirhome.Idonotanticipatebankruptcytrusteestobeamajorplayernegotiatinglumpsumsettlementsbecausetodosowouldriskalienatinglargecreditorsandharmingtheirconsumerproposalwork.viii.SomenonprofitcreditcounsellingfirmsmightnegotiatelumpsumpaymentswiththeconsumerscreditorsassettlementinfullofanoutstandingaccountAtsomefuturedatenonprofitcreditcounsellingagencieswillbecomeexemptfromtheonerousregulatoryregimeundertheAct.ItispossiblethatinthefutureoneormorenonprofitcreditcounsellingagenciesinOntariomightnegotiatelumpsumpaymentswithcreditorsonbehalfoftheirclients.ItremainstobeseentowhatextentnonprofitcreditcounsellingagencieswillnegotiatelumpsumpaymentswithcreditorsafterJuly1,2015.AtthepresenttimeIdonotenvisioncreditcounsellingagenciesbecomingmajorplayersnegotiatinglumpsumsettlementswithcreditorsonbehalfofconsumersforavarietyofreasons.ix.ConsumerswilltakeadvantageofselfhelpremediesthroughOntarioscourtsagainstfirmsthatviolateconsumerprotectionsaffordedundertheActPleasecontactaprofessionalbankruptcytrusteetohelpguideyouthroughyouroptions.18888238239orBankruptcyCanada.caThenewActandRegulation74provideanumberofselfhelpremedieswhichwillenableconsumerswhohavebeenthevictimofillegalbehaviorbydebtsettlementproviderstoseekredressthroughthecourtsystem.TheexistenceoftheseselfhelpremediesshouldmakeiteasierforconsumerstogotocourttogetsatisfactionfromfirmsprovidingdebtsettlementservicesincontraventionoftheOntarioCollectionandDebtSettlementServicesAct.IalsoanticipatethatitwillbemuchmoredifficultforafirmtoillegallyprovidedebtsettlementservicestoOntarioresidentsafterJuly1,2015,becauseofthepotentialglareofbadpublicity.x.EmergenceoffirmsofferingcoachingfordebtsettlementDoItYourselfersIalsoanticipatethatafterJuly1,2015,therewillbeademandamongOntarioresidentsfordebtconsultingservicesprovidedbyindividualswithsignificantexperienceinthecollectionindustryorthedebtsettlementindustry.Ontariomightseetheemergenceofnewdebtconsultingfirmswhichoffercoachingandadviceforthelumpsumsettlementdoityourselfer.Unliketraditionaldebtsettlementproviders,thesedebtconsultingfirmswillnotnegotiatesettlementswithcreditorsonbehalfofconsumerstheiractivitieswillbelimitedtoprovidingadviceandencouragementtothoseconsumerswishingtosettletheirowndebtswiththeircreditorsontheirown.Formoreinformationabouteliminatingyourdebtyoumightwanttocontactyourlocalbankruptcytrustee.