Collections agencies become involved
To make matters worse for those who signed up for these programs, creditors would not stand by and wait while they skipped their monthly payments. They would naturally escalated their collections activities. This could include sending the debt to a collection agency, taking the client to court, seeking a judgment against the client and then garnishing the client’s wages or putting a lien on their house.
Unfortunately, many of these US debt settlement companies are now advertising in Canada and are signing Canadians up for these disastrous for-profit programs that are now illegal in the United States.
Most Canadian non-profit credit counseling organization are very successful with negotiating debt settlements for the simple reason that they will not agree to negotiate unless the situation makes sense. All organizations charge a percentage of the settlement amount as a fee to pay for their service.