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How do I get out of an agreement I signed with a debt settlement company or a credit counsellor?
Clear language definitions to common legal terms.
Debt settlement companies and credit counsellors have to follow the same rules. These companies may help you plan how to manage your debt, and may be able to give financial counselling. There are also two types of credit counsellors: for profit, and non-profit.
The main difference is that non-profit credit counsellors aren’t making a profit from helping you, and they have to follow a code of ethics. For-profit credit counsellors are like debt settlement businesses, which means they are trying to make money from you.
There are also more risks when you use a debt settlement company. They may:
- advertise that they can ‘get rid of’ your debts, but it’s not a guarantee
- not tell all your creditors about the payment plan, so your creditors might keep calling you
- only pay one bill at a time, which means creditors may try to sue you
- be working for your creditor, which means they may not be thinking about what is best for you.
You can find out more about how debt settlement companies work in Step 2.
Debt settlement services are sometimes advertised as "debt settlement", "debt management", "debt arrangement", "debt reduction", or "debt consolidation".
The rules for cancelling contracts with these companies are the same:
- You can cancel the contract at any time within 10 days after you receive a copy of it. You do not have to give a reason for cancelling.This is called the “cooling off” period.
- You can cancel the contract within one year of signing it if:
- they didn’t give you a copy, or
- the contract does not include the information required by law.
You must cancel the agreement in writing. If you cancel, they must give you back any money you paid them.
If you have a complaint about a non-profit credit counsellor or debt settlement company, or about an agreement you signed with one, you can complain to the Ministry of Government and Consumer Services. The Ministry has a complaint form that you can fill out and email.