How to spot sketchy debt advice
(NC) Between the high cost of living and inflation, many of us are struggling with debt. But with financial advice available everywhere - from your uncle’s friend to social media influencers, it can be easy to feel overwhelmed and hard to know whose advice you can trust.
Learning some key warning signs and red flags can help you manage your debt and avoid falling for a scam. Here are some to keep an eye out for:
A magic bullet. If it sounds too good to be true, it probably is. Watch out for high-pressure sales tactics or unrealistic promises to quickly solve your debt problems or fix your credit score. Remember, it’s difficult to change information in your credit history unless something is inaccurate. Raising your credit score will take time while you show your creditors that your financial habits have improved.
A pricey service. Some companies or debt advisors may charge high fees but only offer a high-interest loan to pay off your debt or claim they can negotiate a better deal with your creditors. Instead, Licensed Insolvency Trustees (LITs) are legally required to explore all your debt options and are the only professionals authorized to file a consumer proposal or bankruptcy, which include financial education. You don’t need to pay another advisor to find or consult an LIT.
Protect yourself by consulting reliable sources for information, asking questions and seeking a second opinion. You can also find dependable advice and options to deal with your debt at canada.ca/debt-solutions.