Debt Pooling

Recently these types of companies have been established in Alberta to provide services to people experiencing financial problems.

For a fee, sometimes as high as fourteen percent of the debt being settled, these companies will contact your creditors and agree to distribute any money you pay them to your creditors net of their fees. They cannot legally bind your creditors and there is nothing to stop your creditors from proceeding against you if they decide not to be bound by the debt pooling arrangement.

Debt Poolers may promise to improve your credit rating by making reports that you are honoring the pooling arrangement to the credit bureaus. This is not really a very effective way to improve your credit rating because all of your negative history stays on your credit bureau reports.

Some Debt Poolers tell their clients that they are licensed by the government to provide services to people in financial difficulty. Usually the only licence that they have is the registration of the consolidated trust account that they use to receive and disburse the payments that you make to them.

Many of these companies are nothing more than franchised outlets. The people running the outlets may not have any formal training and their only right to deal with you comes from the fees that they paid to acquire the franchise. The experience that they develop often comes from dealing with your file.

Be careful when dealing with these people. Ask for references and discuss what they are offering you with your own legal advisors. There are usually better options!