How much can these services charge me?
In Ontario, there are rules that credit counsellors and debt settlement companies must follow. They can only help you repay your debts in 2 ways. They can offer each of your creditors:
- an instalment plan to pay off the whole amount, or
- a single payment plan to settle the bill at a reduced amount.
The law also says what fees they can charge you for their services.
Instalment plans
The credit counsellor or debt settlement company can charge you a one-time fee of $50 for setting up a repayment plan for each creditor. They can also charge up to 15% of each payment they make to your creditors.
Single payment plans
The credit counsellor or debt settlement company cannot charge you more than 10% of the original amount of each debt they settle this way.
They are not entitled to their fee until the payment has been made to the creditor. Your debt settlement agreement must tell you how much the counsellor or company is charging for each payment.
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