I mentioned in my previous posting about the debt consultants’ claim to fame – stop the calls, stop a garnishment and settle your debts for considerably less than what you owe. We already know most of this isn’t true, just read Sue Jung’s Part Two blog about “Tasha” and her experience with a debt consultant.
So here’s the real question: Can they provide legal protection from your creditors? 
No. This means your creditors can still pursue legal action against you even if you’ve filed with a debt consultant. If you have a judgement or garnishment happening at work, only by filing a bankruptcy or a consumer proposal can you get these to stop. Hmm, interesting, only a licensed trustee can administer a bankruptcy or proposal, which means only they can stop legal action.
Ted Michalos explains in great detail what happens when you file a bankruptcy and you have a legal proceeding against you or one is looming in the air. Have a peek at his blog, there is some great information for you if you find yourself in this predicament. He explains that when you file a proposal or a bankruptcy a Stay of Proceedings is put in place to stay (or stop) legal proceedings. This is because you have filed something that is regulated under the Federal government law in Canada, in comparison to an unregulated debt solution.
There are many things that debt consultants claim they can do, give you legal protection is not one of them. If you have a threat of a wage garnishment or a lawsuit or you have already been sued you need to speak with a trustee in bankruptcy to help you through this. Visit us at www.hoyes.com or call us directly at 310-PLAN or 905-777-0770 to set up a free initial consultation, you’ll be happy you did.
