Alison Griffiths

Got debt? Need help? If so, you are certainly not alone. With Canadian household debt at record highs, many are struggling to keep their heads above water. For every dollar of disposable income, Canadians now owe $1.51, which is quite a bit more than double the 66 cents of 22 years ago.

Oh sure, some of it is completely our fault. Using our homes as ATMs hasn't helped. And low interest rates making lines of credit dirt cheap has added fuel to the debt fire. But we also have relatively high unemployment — especially among young adults — high student debt and rising real estate prices in most major cities.

It all adds up to a whole lot of people with a whole lot of debt weighing them down. "So, who you gonna call?" If you spend any time watching television or surfing the net, debt settlement companies that advertise "solutions" and "relief" might tempt you. They are even more appealing if they promote themselves as not-for-profit organizations (depending on the province, such companies could well have that status).

However, before you pick up the phone or send an email be aware of the difference between debt settlement companies and not-for-profit credit counselling agencies such as Credit Canada Debt Solutions (formerly Credit Canada) or other charitable organizations.

Debt settlement companies often promise far more than they can or will deliver. Many of them are U.S. based and their goal is strictly their own bottom line, even though they may have not-for-profit status.

South of the border complaints about such businesses reached a crescendo in 2009 and a federal rule came into effect in 2010 banning upfront fees for debt negotiation. The new rules allowed fees to be collected only once each debt was addressed and at least partially negotiated.

Now some U.S. debt settlement companies have associated themselves with large law firms, giving the impression that these so-called lawyer-led debt negotiations also include legal representation in the case of a lawsuit, but that is not the case. And the fees continue.

Here in Canada, Manitoba and Alberta have banned certain debt relief practices and Nova Scotia is in the process of doing so. But that still leaves many consumers vulnerable and confused.

Though such companies are regulated provincially there is deep concern at the federal level about the damage being caused. The Financial Consumer Agency of Canada (FCAC, recently released a consumer alert about debt reduction businesses.