Anyone who really knows me would say that I am passionate about the topic of consumer debt, financial literacy, and helping individuals experiencing problems dealing with their debt situation. My partner, Danielle, might disagree with the word passionate. She would say I am obsessed about it!
Between 2008 and 2009 I spent the better part of two years writing The Wolf At The Door: What To Do When Collection Agencies Come Calling (2010), published by McClelland & Stewart. You might be surprised to learn about the single most disturbing thing I discovered while researching The Wolf At The Door. It certainly was not how mean-spirited and cruel that some bill collectors were in their dealings with debtors. I knew that first-hand before I started writing my book!
What concerned me the most, in fact, was the conduct of what I call the “debt help industry” in Canada. These are the people advertising on the radio or the internet informing consumers how they can help eliminate their debt. When I speak about the “debt help industry” I would include debt consolidation loan providers, credit counselling agencies, debt settlement firms, and bankruptcy trustees. I know a number of these people personally, many of whom I consider to be friends and for whom I have the highest regard.
A consumer experiencing financial distress could conceivably have more than one attractive option for dealing with their current debt situation. They might take out a debt consolidation loan, enroll in a Debt Management Plan with a credit counselling agency, sign a contract for debt settlement services or see a bankrupty trustee and make a consumer proposal or file for personal bankruptcy. Alternatively, because the consumer is judgment proof, near-judgment proof, or because of the expiry of a limitation period they might be better off doing absolutely nothing.
To a significant extent the “debt help industry” is marketing services–and not providing unbiased financial advice
Unfortunately, these firms in the “debt help industry” do not receive a penny in compensation for providing consumers advice–they are only compensated when you sign up for a service, or program, offered by their particular firm. It is simply human nature that when a consumer makes an appointment to see someone in the “debt help industry” the information that the consumer receives is going to be influenced–to some extent—by the fact that if the consumer walks out that door without “signing up” for the particular debt relief option available from that firm then the firm does not earn a penny in fees. Firms in the “debt help industry” have a significant conflict of interest providing unbiased financial advice to a consumer with debt problems.
Life in the modern world is full of conflicts of interest. What makes conflicts of interest in the “debt help industry” tragic is the existence of a perfect storm. This perfect storm is created by the vulnerability of people experiencing debt problems combined with the abysmal level of financial literacy amongst Canadians. Few Canadians know what their options are for eliminating debt and fewer still can identify the one or two optimal strategies for dealing with their debt situation.
Many distressed consumers making very poor debt-related decisions
Each weekday in Canada tens of thousands of Canadians receive collection calls and collection letters from creditors, collection agencies and law firms regarding overdue bills. These communications–particularly collection calls from aggresive bill collectors–encourage people to make poor decisions addressing their debt situation. The carnage arising from these poor decisions is hard to quantify but it contributes to a virtual ocean of unhappiness including many failed relationships and divorce.
Over the past eight years I have often said that it would be great if Canadians could simply phone an expert on consumer debt, pay the expert for 15 or 30 minutes of the expert’s time, and have the expert help identify the one or two most optimal strategies for dealing with the consumer’s particular debt situation. The expert is simply being paid for his unbiased advice. He has no financial incentive to encourage you to select a particular debt resolution service.
New era has arrived: Unbiased expert debt resolution advice
It is February 16, 2015, and that day I often thought about has arrived! It is now possible for Canadians, or a non-resident who has incurred a debt in Canada, to call Comprehensive Debt Solutions Inc., arrange a brief telephone call at a reasonable cost, and receive advice from Mark Silverthorn–not only advice from a recognized expert on consumer debt but also from an unbiased source of information.
I anticipate having a very fulfilling time assisting Canadians!