Credit counseling professional – What are you paying for?

The following question was asked via January 13, 2015 – Credit Counseling Professional

Email: [email]
Subject: Your article here is grossly misleading
We structure formal proposals on behalf of our clients the debtors in their best interests. The process does involve a trustee who works in the interest of the creditor. At no point ever can you as a trustee have a debtor as a client under the bankruptcy & insolvency act. Lastly, we don’t refer our clients to anyone! We do however select trustees to represent the creditor’s interests in the process and to administrate through the term of proposal. Trustees are lined up outside our doors wanting to involve themselves with us and our after care services that are unparallelled & unequaled in the industry. We can do things you cannot. You might want to re-think your opinion perhaps through educating yourself as a local 4 Pillars office out your way might be a huge benefit to compliment your practice instead of fearing and trying to discredit us.
Response by Trustee, January 2015

Dear Sir

In response to your email dated January 13, 2015 I can only assume that you are responding to a letter to the Editor of the Business Examiner written and posted to my blog in April 2014 in which I point out the errors in both the advertising by 4 Pillars and the related article written in that publication. As a matter of follow up, subsequently to when the blog was posted, the advertisement and article as well as a copy of the letter to the editor of the Business Examiner about 4 Pillars was forwarded to the Office of the Superintendent of Bankruptcy for their review and comment. The complaint also included a copy of a Victoria 4 Pillars ad that ran in the Victoria publication of the “Coffee News. At that time both the Coffee News advertisement and the 4 Pillars website advertised their services to include consumer proposals.

In response to my complaint, the OSB required that significant changes to be made by the local 4 Pillars office in their advertising, both on-line and in print, to ensure that the services they advertise did not include bankruptcy or filing of consumer proposals. In part the OSB wrote, on June 6, 2014,

“…the second page of the website of 4 Pillars Victoria (, Debt Consultant) under
the heading of “Our Debt Relief Services for Victoria BC” refers to typically offered
services, including “Filing of consumer proposals,” and “Bankruptcy.” Since these
services can be offered only by licenced bankruptcy Trustees, and Mr. Grew is not a
Trustee, the wording should be changed to make clear to members of the public that
trustees, not 4 Pillars Victoria (“personal” Debt Consultant) offer these services.
Reference at the top of page three of the website “to a consumer proposal being filed with
a Bankruptcy Trustee” comes too late, and neglects to note that bankruptcies are also
filed by a Trustee.”
… and

“…It is an offence to represent oneself as being a Trustee when not duly licensed. Subsection
202(1)(a) of the BIA states as follows;

“A person who, not being a licensed Trustee represents himself to be a licensed Trustee… guilty of an offence punishable on summary conviction and is liable to a fine not exceeding five thousand dollars, or to imprisonment for a term not exceeding one year, or to both.”

Similarly, subsection 52(1) of the Competition Act makes it an offense to make a representation which is false or misleading to the public. Such a matter could be referred to the Competition Bureau for investigation and further action.

Please respond to this letter and confirm that you have amended the Coffee News advertisement as agreed, and have made the necessary changes on the website of 4 Pillars Victoria (, Debt Consultant). “

As you suggest, it may be that 4Pillars Victoria “consult” on proposals or bankruptcies, but they themselves cannot offer these services.

As stated in my letter to the editor, I note that the local 4 Pillars office at that time, both in print (Business Examiner) and on their website, advertised their services to include “Consumer Proposals” and “bankruptcy” (see above). As you are most likely aware, a formal Consumer Proposal which is backed by federal legislation, the Bankruptcy and Insolvency Act, (the “Act”) can only be administered by a federally licensed trustee in bankruptcy. As confirmed by the OSB in their investigation above, as 4Pillars in Victoria are not licensed trustees in bankruptcy, they cannot act as an administrator under a Consumer Proposal.

To help you understand what a Trustee in Bankruptcy does, I usually tell people that while acting as a credit counseling professional and trustee, we are the cops on the corner directing traffic, trying to keep the debtors and creditors from bumping into each other. The rules of the road are governed under the Bankruptcy and Insolvency Act and we attempt to assist debtors navigate the journey. If debtors are “stuck in traffic” and would like the assistance of a credit counseling professional with a formal proceeding which allows them to get through the financial traffic jam by completely shedding their debt (bankruptcy) or a formal partial repayment plan that can legally binds all of a debtor’s creditors (a Proposal/Consumer Proposal), then a licensed trustee in bankruptcy is the only option in Canada.

One of the best things that debtors find when dealing with a licensed trustee in bankruptcy acting as a credit counseling professional is that all the fees and services are mandated under the Act. If a debtor has any questions about the services provided by a trustee or the fees that we can charge for that service, debtors can refer to the federal Act. The Act itself is administered under Industry Canada and the Office of the Superintendent of Bankruptcy. Further, the Act outlines standards and Codes of Ethics for trustees, minimal educational and training requirements, and safekeeping standards for debtor and creditor assets such as minimum insurance or bonding requirements. Further, most trustees in Canada belong to a national professional organization, the CAIRP ( Canadian Association of Insolvency and Restructuring Professionals) which mandates strict ethical guidelines and Codes of Conduct as well as administering ongoing continuing education guidelines and requirements for its members. Most trustees also either hold formal accounting designations, such as CA, CGA or CMA or have been trained as lawyers, and have post-secondary degrees. Personally, I am both a CIRP and a Chartered Accountant (now CPA)

As for “we can do things that you cannot”, as outlined above, I am governed by strict operating guidelines and ethics as a trustee. The services that I provide while acting as a trustee and credit counseling professional, including the fees that I can charge are mandated by the Act and the Courts and thus for me, and all trustees in Canada, we operate in an environment of full disclosure to all parties including debtors, creditors, the courts and the federal government. I do not purport to know the full services that your franchisees provide, but I am well aware of the services that your franchisees cannot provide if they are not licensed trustees: If they are NOT licensed trustees in bankruptcy then they cannot administer either a bankruptcy or a Proposal. Any Proposal or bankruptcy is governed strictly by the rules and regulation outlined under the Bankruptcy and Insolvency Act. The success of the Proposal comes from the ability of the debtor and his or her creditors to come to a negotiated settlement which is solely administered by the trustee. The legislative power of a Consumer Proposal is that it can bind ALL creditors as long as a simple majority of creditors accept the Proposal (thus one creditor cannot hang up the process)

I also cannot and do not comment on your statement that “Trustees are lining up outside our doors” (although based on your information you “don’t refer” your “clients” to these Trustees, why they are lining up would be anyone’s guess) as I have no personal experience with such. As with all trustees in Victoria, as credit counseling professionals we offer a free consultation where we sit down with every debtor and outline their options, be it either a formal proceeding such as a bankruptcy or Proposal, or an informal arrangement if this is the best option. This consultation is free and includes all necessary meetings to make the debtor understand the process and includes assistance with information gathering and documentation confirmation. There is no additional fee for the preparation of the application form or preparation of the formal documentation needed to either file for bankruptcy or for Proposal – the fees that trustees charge are mandated by the Act and cover the entire bankruptcy/Proposal process.

The fees charged by the trustee also cover two mandatory insolvency counselling sessions. These session are also covered in the fees outlined under the Act charged by the trustee. These credit counselling session are mandatory in either a personal bankruptcy or a Consumer Proposal and are held with an insolvency counselor where we look at the underlying causes of the debtor’s personal insolvency situation including the proper use of credit and their personal spending patterns. The second session also includes a discussion surrounding non-budgetary reasons for insolvency and other diverse issues such as the proper use of credit, repairing your credit score and proper planning for personal income tax issues.
I have in no way tried to discredit 4Pillars nor am I afraid of your franchisees. I will continue to vigorously defend my own personal position and hopefully educate the public as to the myriad of confusing services available to debtors struggling with insurmountable debt. As I am sure you are aware, anyone can call themselves a “debt consultant” or “credit counsellor” as these terms are not publicly controlled. I refer you directly to the debtor warning issued by the Office of the Superintendent of Bankruptcy. – for a discussion surrounding these issues.

Public education is the key to ensuring that those looking for assistance in dealing with consumer debt, understand with whom they are dealing and for which services they are being charged.

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