Frequently Asked Questions

1. What is the difference between credit and debt?

The two can be a bit misunderstood. Credit has the connotation of being good; debt has the implication of being bad. According to Webster’s Dictionary , Credit is “the provision of money, goods, or services with the expectation of future payment”. Debt is “something owed; an obligation”.

Although most people (and businesses) need credit, many don’t understand that as soon as you take it, you have debt! What consumers need to understand is that credit is a liability for you and an asset to your creditor.

2. I thought credit was such a good thing but now I am overwhelmed with debt. Where did I go wrong?

Credit can be a good thing when used properly. Before you decide to use credit you need to understand the distinction between good debt and bad debt:

• Good debt is when you borrow money to purchase an asset (home, RRSP, non-registered investments, or business) and that asset increases in value to allow you to repay the debt and be left with something. Bad debt is purchasing liabilities with the money you have borrowed.
• Having good debt is wrapped in the concept called OPM – using other people’s money to increase your net worth.

3. How do I know when my debt problems are getting out of control?

You will likely experience a high degree of stress related to your financial problems.

4. You refer to the term ‘Restructuring’ in your website. Why and when does restructuring become important?

You may need to be restructured when one or more of the following have occurred:

• You have used all of your available credit or have started borrowing from secondary lenders and are paying over 20% in interest rates.
• You are in a vicious cycle with payday loans and can’t get out.
• You use credit to make your debt payments.
• You are spending more than you make and/or have little, if any, savings.
• You have no budget and pay for most of your purchases with credit cards.
• You are not honest about your spending habits with your partner.
• You don’t pay your bills when due, and have your creditors or their collection agents sending nasty letters or making annoying or abusive phone calls.
• You realize your credit rating is bad and no longer have the ability to service your debts.

5. Who are your typical clients?

We advertise and ‘hold out our shingle’ as the Debtor’s Advocate. We are a debt consulting company whose typical client is either an individual, family, or small business who is struggling financially. We will try to help everyone, regardless of the amount of debt owed. Our clients not only require debt reduction or elimination services, but also the products and services necessary to assist in their rehabilitation.

We also have optimized products and services available for consumers who have not reached the end of their borrowing limits or are in the process of rebuilding their credit, and want to increase their financial position and net worth.

6. How much are the fees that you charge?

Our fees are built in to your monthly payments, so when you’re done paying your debt off, we’re done collecting our fee. Fees are worked out on a case-by-case basis, factoring in each client’s ability to pay. If we can’t help you, you won’t be charged.

Fees can vary based on our client’s ability to pay, but encompass the complexity of the problems, the time that will be spent on the file, the number and type of creditors, and the amount of money we are able to save the client. Generally they will range from several hundred to several thousand dollars.

7. What types of debt do you work with?

We work primarily with unsecured debts, but in many cases, work with secured debts as well. Some of the more common are listed:

• Credit cards
• Personal loans
• Business loans
• Suppliers
• Lines of credit and Overdrafts
• Student loans
• Payday loans
• Utilities
• Car loans or leases
• Mortgages
• Income tax
• GST
• Etc.

8. I like the idea of the debt reduction or debt elimination programs you offer as the Debtors Advocate, but don’t I have a moral obligation to repay the debts?

If a repayment program makes sense for you, we will let you know. But if it makes more sense for you to reduce or eliminate your debts, we will tell you that also.

No, there is no moral obligation but rather a contractual obligation that you have to your creditors. We are able help you to change the contractual relationships and arrange protection for you. It is just business, don’t make it personal.