Mikestrathdee’s Blog


Dealing with debt
January 21, 2011, 10:04 pm
Filed under: Debt | Tags:

Heard any sad debt stories lately? Chances are you know someone who is struggling financially as a

result of overspending, job loss or health issues.

The amount of debt owed by Canadians has been increasing at a staggering rate in recent years, and

shows no signs of slowing down.

Asked what will happen with their personal finances in the next six months,

about one person in five who answered a recent national Nanos poll said their debt will increase. Almost half said their debt load will stay the same, and only 30 per cent said it will decrease. Looming interest rate increases will change some of these situations from dangerous to desperate.

By the time people realize their situation is serious, and reach out to a friend, pastor or lay leader

at their church for help, the problem is often complex and not easily solved.

In many cases, the people who are asked to assist aren’t well equipped to do so. They are unaware of

the services offered by community counselling agencies, or the limits of same, let alone the hefty fees

charged by the rapidly growing for-profit debt counselling sector. They don’t know how to set

appropriate boundaries, such as insisting on full disclosure before agreeing to help someone in difficulty.

Nor do they usually understand the ins and outs of making a proposal to creditors, or the process and

consequences of declaring bankruptcy.

Lawyer Mark Silverthorn addresses many aspects of this information vacuum in his book “The Wolf at

the Door – What to Do When Collection Agencies Come Calling.’’ Silverthorn is well versed in what

happens when people can’t or don’t pay their debts. He spent 12 years working for collection agencies,

and now has switched teams – helping consumers in their dealings with bill collectors.

Silverthorn’s book provides a useful overview of how different types of debts are collected, negotiated

downwards or written off, depending on circumstances and the passage of time.

He also explains how the “debt collection game” is played in Canada, chronicling instances of

commission-based collectors making illegal threats, false or misleading statements in an effort to

meet their quotas and keep their jobs.

Silverthorn provides timing tips – as with buying used cars, the best time to

negotiate with a collector is near the end of the month, especially in December. He also airs the dirty

laundry of a nasty, sometimes unethical industry that should face greater government oversight.

Three chapters are dedicated to ways of dealing with unprofessional bill collectors.

Silverthorn’s book would be a great addition to the toolkit of elders, deacons or anyone else who is

trying to help others figure out their options. Whether you want to give this book to someone who is in

debt is another question. Some of his suggestions, such as the chapter entitled “How to Avoid Paying

Your Outstanding Accounts” get into murky ethical waters, particularly for people

who believe the biblical admonition (Romans 13: 7-8) that we should repay others what we owe.

For more information, see Silverthorn’s website, http://www.helpwithcollectioncalls.ca

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