56 – Best Debt Consultant: Find the Right One for You

Wayne Kay 00:04
Welcome to the Debt Matters podcast, where we help Canadians find solutions to their debt with Licensed Insolvency Trustees from across Canada. 

I’m Wayne Kay, and in today’s show, we’re going to talk about how to find the best debt consultant. Which is going to be the right one for you. So what does a debt consultant do specifically, and are some better than others? What do you look for when choosing an LIT? And how important is it that the LIT be local? 

My guest today is Leigh Taylor from LCTaylor, Licensed Insolvency Trustee with offices in Winnipeg and Kenora. Thanks for being here, Leigh. Leigh Taylor back on the show again. Leigh, it’s always a pleasure. Thanks for being here.

Leigh Taylor 00:49
Well, it’s a pleasure being here, Wayne.

Wayne Kay 00:51
We always get into these great discussions. I mean, the show is all about helping Canadians find these solutions when they are in debt. They’re in trouble. They don’t know where they’re going to go. They don’t know what to do. 

And this show, it’s all about education. And with Licensed Insolvency Trustees across the country, I have just learned so much. I think today’s show I would like you to help us to learn more about what a Licensed Insolvency Trustee does.

Leigh Taylor 01:21
Sure. Licensed Insolvency Trustees are licensed by the federal government, and they have strict regulations. They have educational background checks that are required. You have to write exams through oral boards and these sorts of things.

They want to make sure that if you are given the right to call yourself a licensed consultant, they trust you’re an expert, you know the field, and you know sort of what all the answers are. That’s the theory.

Wayne Kay 01:47
Okay, it’s fully regulated, which I think is quite amazing. And an LIT is different from a debt consultant.

Leigh Taylor 01:57
It’s really important. And I’ve emphasized this a lot because a debt consultant is just a general category. It’s anybody that wants to hang up their shingle and say, oh, come to me for advice, I’ll charge you, and I’ll give you some sort of advice. So that consultant can be really confusing. 

At the risk of oversimplifying, it has two general categories. One is Licensed Insolvency Trustees who are regulated. They have codes of ethics. They have responsibilities under the Bankruptcy Insolvency Act, et cetera. And then there’s credit counselors. 

Now, the thing with credit counselors is that it’s a very broad spectrum of people. Some of them are sort of, how shall I put this diplomatic, sort of a little fly by night. They operate on the Internet. If you contact them, you may be talking to somebody in Louisiana or Germany or somewhere else because you don’t know where they are. 

They hold out all sorts of innuendos or promises that if you give us $800 a month, we’re going to solve all your credit problems. And six months later you find out that wasn’t exactly true. We have paid them a lot of money and we got no results, we’re still being sued.

There are other credit counselors that do a good job. They sit down with people, they help them with budgeting, and they try and do what they can. The biggest difference, though, is the tools that they have. The general credit counselors that try to negotiate your debts, et cetera, just do so as best they can. Nobody is bound by any of the solutions that they come up with, and it’s very precarious. 

We see a lot of people who have gone through a year’s worth of working with a credit counselor only to find out they can’t solve the problem and all the money they spent in fees and everything else is gone. And that’s sort of sad because if they came to see us first we could have certainly put them on the right path. 

It’s not everybody that should go bankrupt or file a Consumer Proposal or whatever through us. But they should talk to us so that they know what sort of the rules of the game are. What can the creditors do, what are real solutions and what aren’t real solutions. So if you know that, then you can make an informed decision as to what’s in your best interest. 

You don’t always get that with credit counselors, because credit counselors, they can’t do Bankruptcies, they can’t do Consumer Proposals, and they can’t bind the creditors to some sort of repayment arrangement – which leaves it kind of loosey goosey down the road when you think you’re paying them off and you really aren’t.

Wayne Kay 04:39
Do they ever suggest that the client contact a Licensed Insolvency Trustee? Do they ever say, well, this is beyond our wheelhouse, we need to send you over to Leigh Taylor?

Leigh Taylor 04:53
Yes, some of them do, not all of them. And the difficulty sometimes is defining which do and which don’t.

The problem, even with the ones that do, they’ll probably charge you some fees upfront, go through the process with you, maybe give you information as to what’s available to you and what you can do about your debt. Then if they can’t help you, refer you on. But you’ve already paid a lot of fees to them.

Wayne Kay 05:18
And that’s something that’s special about a Licensed Insolvency Trustee. It’s a free consultation. You go for your first meeting and it’s free consultation.

Here’s what the options are and here’s maybe some ideas. And if they decide at that point, oh yes, that’s really all I need at this point, they can walk away and try to make things right on their own.

Leigh Taylor 05:37
That’s right. And that’s a much smarter starting point with trying to solve the problems. And we’ve tried to tell this to people, but trying to reach everybody in financial difficulties is a difficult thing.

Not all of them know what’s going on. A lot of them listen to American TV ads because they don’t know the difference. Or they go onto the internet and check out and get onto various websites that don’t really give them the facts and the alternatives that are available to them. So they may get themselves into trouble and cost themselves a lot of grief and a lot of money before they realize that a lot of this stuff is a bit of a con game.

Wayne Kay 06:16
And they’re also trying to – there’s pride involved and you want to be able to take care of these debts if you have them. And then all of a sudden people start getting rid of things and they go, well, okay, I guess I better cash in the RRSPs to try to pay off the debt or I better get rid of my car and I guess I don’t need some of this furniture, I’ll sell that. And had they only contacted an LIT they would realize, oh no, you do not have to do any of those things.

Leigh Taylor 06:43
That’s right. And that’s really sad when people have saved their RSPs for their old age and they end up cashing in – in some vain, futile attempt to satisfy their creditors, not knowing what the rules are. Not knowing that in Canada, RSPs can be claimed exempt from seizure.

That’s good for the economy, it’s good for the government, it’s good for you. Otherwise the government’s going to have to support you in your old age even more than they likely will. 

Those are the kinds of things they should know. That’s why I say the earlier they contact us, the more they know what options are available to them, what they should or should not be doing, and what the proper way to solve their problem is.

Wayne Kay 07:20
What are some of the questions you should ask when you’re trying to identify who will be the perfect person to help me with debt? What are some questions you should ask?

Leigh Taylor 07:31
I think you should talk to somebody that’s got all of the options available and can tell you about them. Not every credit counselor has all the options. Well, none of them have all the options because they can’t do Bankruptcies or tell you about Consumer Proposals and these sorts of things. So if you go to somebody that can tell you all of that – and you probably should do a little exploration and find out whether they’re local or not.

 If you’re in Winnipeg, then, it makes a lot of sense to deal with somebody that’s in Winnipeg that knows the local situation, that has an office. If you have to go talk to them in person, which is always a good idea, they actually have an office as opposed to talking to somebody whose head office is in Etobicoke and has never seen Manitoba. That’s always a problem. 

So if you look for that, you’ll get somebody that’s local that you can talk to that is available. If there are problems, and sometimes there are problems in Bankruptcies or proposals or whatever. You’d really like to sit down and make sure you can get back on track. Pretty hard to do by trying to get hold of somebody by telephone in another province or down in the States who wouldn’t return your calls. 

So you look at that and you look at the qualifications of the individual you’re talking to. Are you talking to a Trustee or you’re talking to a qualified administrator? Or are you talking to a clerk on the phone because the other people are too busy?

Wayne Kay 08:59
And there’s something about sitting face to face with somebody.

Leigh Taylor 09:02
Well, we found COVID has sort of screwed this up for a lot of people because nobody wanted to expose themselves or expose other people. So everything is done by Zoom and telephone and all this stuff. And you could do a lot, but you miss something. You miss it because you’re not getting that personal contact. You’re not getting that comfortable feeling that I can deal with this person because over the phone is a little more difficult.

Wayne Kay 09:26
Are there different laws for different provinces?

Leigh Taylor 09:29
Yes. Now, it’s interesting. The Bankruptcy and Solvency Act is federal legislation, so it’s the same right across the country. But anytime that you’re dealing with anything that’s in provincial jurisdiction, it’s different. If you’re dealing with security, the bank has security on your car. Well, what they have to do to enforce their security is different in every province, similar in many provinces, but still different. We have a company called the Profit Security Act in Manitoba that says this is what a secured credit could do to seize your car or the rules and regulations they have to follow with it.

So that’s considerably different than if you’re in BC, for example. The laws relating to marital property are much different in BC than in Manitoba. So if you’ve got marital property disputes and financial problems and everything, you might want to talk to somebody that knows a little bit more about the local scene, rather than somebody that’s going to give you general answers that will apply in different provinces. 

Even the laws that deal with collection agents. What can collection agents do? The Consumer Protection Act in Manitoba deals with that, and that is a different legislation than other provinces. So local knowledge of the various rules and regulations is particularly important if you’re dealing with property, real estate, real estate law very considerably. It’s really a good idea to know the market that you’re in if you’re going to seek advice.

Wayne Kay 11:02
Well, and I think that brings up another key point. Just by hearing you talk about dealing with divorce, you’re talking about real estate law. There’s many different places you’re going to be dealing with when you’re in some kind of a financial situation and troubles. So just by you rattling them off, it’s like, oh my goodness. If you’re dealing with divorce, that does cause a lot of people to go into Bankruptcy. You want to make sure that you get it right.

Leigh Taylor 11:28
Yes. And that’s one of the reasons you want to deal with an LIT, because we have training in house experience with all of our people. In order to get your license, you need several years of experience plus academic background to qualify. You end up doing examinations, courses, studies. Usually it takes between three and five years to go through that. At the end of it, there’s an examination you have to pass, and then you have to sit before an oral board where other Trustees and lawyers will question you as to whether you know what you’re talking about.

So it’s extensive. It takes a long time to do it, but the body of knowledge and experience that you need in this area, it’s important. It’s hard to get, and you want to make sure you’re talking to somebody that’s got it.

Wayne Kay 12:18
I do want to brag about you for just a moment, by the way –  just to say congratulations on 30 years since you started LCTaylor.

Leigh Taylor 12:27
Yes. September 8, 1992, we decided to leave a different accounting partnership and focus on insolvency, helping people with their problems. So we went out on our own, not quite knowing how things were going to go. But it’s the fastest 30 years you can imagine, and it’s been just a very rewarding time. We’ve helped an awful lot of people, and I still run into people on the street sometimes. 

I don’t remember all of them and they remember me, but it comes back pretty quick. They talk about how things have turned out so well for them. They’ve taken that step and it’s just gone so well.

Wayne Kay 13:10
Yes, that’s amazing. 30 years in business. And think of all the people that have gone through the office, all the people that lives have changed. Because once they get this horrible debt and all that’s associated with that off their shoulders, they can start living and being proactive again in their lives.

Leigh Taylor 13:28
Yes, and I’ve had people come up to me –  I think they came up to me one time when I was looking in Best Buy at a computer or whatever. He talked my ear off for 20 minutes and I loved every second of it.

Telling me how his son had just graduated from engineering at the University of Manitoba. And he was showing me pictures and he said, It’s all possible because we helped him get back on his feet financially and be able to support his family. And it’s stories like that that just gets you excited about coming into work every day.

Wayne Kay 13:58
Yes. Wow, 30 years just flies by. LCTaylor keeps helping. And we should always mention the free consultation. So wouldn’t it be great if, I know that this would be like a dream so it would never work, but if we had a bunch of students, 18 or 19 that would go in and get some financial advice.

Leigh Taylor 14:18
Well, I have been a proponent for getting this taught in high school. You get 16,17 year olds that are about to become adults and go out and venture into the world. And most of them, well, they don’t know how to balance a cheque book because they’re not quite sure what a chequing account is. 

They sure don’t know what a budget is because it’s never been taught in schools and they really don’t know what to do. What is small claims court?
I don’t know. It’s not really their fault.

A lot of times their parents never got the education and don’t know either. So it just perpetuates that problem where people get themselves into trouble and find out the hard way a lot of times what the answers are.

Wayne Kay 15:03
Right. Well, thank you very much for what you do and I appreciate chatting with you. And thank you very much for the information. Was there anything else you needed to share with us regarding picking that best Licensed Insolvency Trustee to help out?

Leigh Taylor 15:22
Yes, don’t be afraid to talk to them. Give us a call, phone us up. We try to make things as easy and nonjudgmental as we can so that we can find out just what the problem is, what caused it, and what the best solution is. So we’re on your side.

Wayne Kay 15:38
Terrific. Great way to end it. Thank you very much. Leigh.

Leigh Taylor 15:41
Thank you, Wayne.

Wayne Kay 15:42
My guest today, Leigh Taylor from LCTaylor Licensed Insolvency Trustee.
And you can find out more at LCTaylor.com. And that’s also where you can schedule your free consultation, book it online, or give them a phone call. 

Well, that’s it for today’s Debt Matters podcast. Make sure you subscribe wherever you get your favorite podcast from. And of course, for more information, you can always check out debtmatters.ca. Thanks so much for listening.