The department of Economics at Carleton University has developed a service learning volunteer placement component for one of its first-year courses, "The Economics of Social Issues". Doyle Salewski is participating as a community partner in this initiative by providing the students with an opportunity to study/research specific real world issues that will provide them with an opportunity to make a difference to their community by learning how to apply economics to everyday situations. The students will work at the Doyle Salewski office and will be expected to prepare a report and presentation to their class at the end of the program.

According to Brian Doyle, President of Doyle Salewski: "We appreciate our continuing association with Carleton University and we anticipate that the results of this project will prove to be of real value to the students, our firm, and those burdened with excessive debt".

After deceiving roughly 300,000 heavily indebted customers for approximately $172 million, Maryland based Ameridebt, a credit counsellor organization, filed for bankruptcy in 2004. The head of the organization, Andris Pukke, was ordered by the Federal Trade Commission to fund $40 million in customer restitution, yet still refused to accept any responsibility in his company’s wilful and illegal misrepresentation and deception of its customers. Promising debt assistance, and no upfront fees, Ameridebt solely enrolled its clients in debt management courses, and did nothing to repair clients’ troubled state of fiscal affairs. When fees were paid, customers perceived them as their first payments to their creditor, yet instead they were simply collected by Ameridebt. Despite advertising Ameridebt as a non-profit company, Pukke would funnel funds to close friends and linked profitable companies. Pukke uses these hidden funds he accrued through Ameridebt’s deceptive practice to fund a lavish lifestyle, all the while further finically crippling his already insolvent clientele.

Unfortunately, the Ameridebt saga was not an isolated or extraordinary event. Instead it is an example of the thriving industry of deceptive credit and debt counsellors preying on fearful and desperate individuals saddled with excessive debt. Using ambiguous language and vague promises to lure customer, these counsellors simply leech thousands of dollars from their customers for consultations and credit management courses without significantly assisting them. These organizations promise customers a way out of their excessive debt obligations without reverting to bankruptcy, yet these counsellors do not boast the credentials required to file for bankruptcy and a proposal. Under the Bankruptcy and Insolvency Act, only licensed bankruptcy trustees are permitted to forge such agreements in Canada which provide numerous benefits like creditor protection that non-licensed counsellors cannot provide.

Some debt counselling organizations claim to offer alleviation of burdening debt, but do not possess the legal qualifications to instigate a stay of proceedings (credit protection), which severely limits the options these organizations can offer. The vast majority of these organizations fail to offer any substantial or consequential procedures, instead advertising educational and assistive programs to properly re-align customer’s finances and to correct such detrimental behaviour like accruing massive unbearable credit card debt. Even if such programs are beneficial, for deeply indebted customers, advice and education fail to rehabilitate their immediate fiscal situation. Only bankruptcy or consumer proposals offer the legal safeguards to protect indebted individuals from creditors and harassing collection notices.

One such creditor counsellor, state on its website that it offers a curious program called the "Debt Management Program." According to the counselling organization’s website, they will negotiate on behalf of its customers with their respective creditors, concretely promising nothing more than representation. This is a pretty meagre response to a catastrophic ordeal. Also, the organization claims it will provide its customers with "additional education, guidance and motivation." Providing something as vague as motivation are the offerings of a spiritual mentor not an alleged professional credit relief organization. Interestingly, the organization implicitly mentions the payment process claiming it will delegate its customer’s payments among the customer’s creditors. Basically the credit counsellor offers itself as an intermediary between its customer’s and their creditors, an unnecessary figure, providing no legal apparatus to assist those with excessive debt, only vague and expensive promises of rehabilitation.

In conclusion, such fraudulent credit counselling companies dilute and convolute the pool of resources available to those suffering from exhaustive debt, leading only to the loss of precious income will scarcely anything to show in return. Only legally certified bankruptcy trustees can offer the kind of protection that can assist those with excessive and unworkable debt in Canada.

In Ontario, the student loan system for post-secondary education attempts to assist students who otherwise could not afford a university or college education by granting them loans dependent on their current financial situation. This complex system is administered by the Ontario Student Assistance Program (OSAP); OSAP must abide by provincial legislation which entitles all qualified students whose parental income is not substantial enough to afford post-secondary education to receive financial assistance. An oversimplification of the highly complex method OSAP employs for allotting loans would be that the less fiscal support an individual has, the more money OSAP will lend them.

Although, OSAP along with the Federal Government provides grants and bursaries to a wide variety of underprivileged students, including students with deceased parents, crown wards, or impoverished students, the vast majority who utilize OSAP do not fall into such categories but still cannot afford a post-secondary education.

For full-time students applying for OSAP, the assistance one will receive is based on an oversimplified formula: allowable education expenses subtracted by expected financial contributions. While allowable education expenses include: tuition fees, compulsory fees, books and equipment, an allowance for computer related costs and child care costs, there exists a maximum amount that OSAP can give to a single full-time student. If you are a full-time student without dependents, OSAP can lend you up to $350 dollars a week, whereas if you are a full-time student who is either married, in a common law relationship or is a sole support parent, OSAP can lend you up to $545 dollars a week. The tuition maximum is calculated by term and is set at $2,250 dollars. Any amount OSAP will give a student due to their educational expenses is deducted by that individual’s expected financial contribution. The expected financial contribution is the Ontario government’s calculation of the amount of money one should have available for university, taking into account one’s parental income and, if applicable, spousal income. Also, taken into consideration is the amount of income the individual has accrued before entering post-secondary schooling as well as the expected income that individual will acquire during the study period.

Although OSAP does take into account a myriad of options in deciding whether to lend a student money, nowhere on the organization’s website does it state that loan amounts will reflect the person’s ability to repay their debt or that loans will reflect the expected earning power of that student depending on the degree they obtain. The degree, an individual anticipates is apparently not considered during the OSAP process. Basically whether or not a student is taking a degree in English or attempting to become a doctor, OSAP will review the amount of money they allot to the student depending on the cost of education and the previously mentioned costs and income. When it comes to repaying the loan OSAP has given a student, after one has finished their schooling and six months has passed, that student is required to commence repayment. An indebted student must contact a National Student Loans Centre after graduation to consult and arrange how to repay the OSAP loan.

Interest will only start to accrue after the student has completed their program, meaning although an individual doesn’t have to start repayment, the interest will start to accumulate from completion of the last course. There are also penalties for not repaying the loan; the government will withhold one’s income tax refund it may be reported to a credit bureau; making it difficult to obtain other loans.

Despite the importance granted to the repayment of loans, and the severity of the consequences for non-repayment, it is surprising that more of an emphasis is not placed on the projected ability to reimburse OSAP.

This lack of interest in the ability to repay the loan during the initial application stage amounts to a misrepresentation of the importance and severity of the situation and the agreement being reached. This leads to an unsurprisingly large number of students deeply indebted to the government loan system.

The apparent exclusion of any pre-applicatory discussions on fiscal planning and future repayment hinders the applicants’ ability to properly plot and manage their responsibilities. Unfortunately, government legislation prohibits individuals from reducing or eliminating excessive student loan debt through bankruptcy or a consumer proposal for at least seven years, arresting the economic freedom of severely indebted recent graduates with inadequate incomes.

There must be more restrictive and conservative measures employed to prevent a student from amassing a large sum of debt that does not reflect the expected future earning power of that student. Hence, if a student is in the process of obtaining a specific degree, the student loan officers should calculate the projected earning power of the average student who has completed that program; calibrate their loan allowances to those projections. An example of such would be if a student who is in the midst of an university English program is applying for a loan, then that student’s loan should be in the realm of what an average person with such a degree could afford, not an unlimited amount tailored to the cost or circumstance that student faces.

Also, the current laws regulating bankruptcy which specifically deal with student loan debt should be examined and reformed to formulate a more equitable system which provides all Canadians, no matter what debts they have, the same legal options to shield themselves from creditors and relieve themselves from unbearable and excessive debt burdens.

Interestingly, the measures prescribed in this brief paper, do not in large part differ from the standard procedures at lending institutions throughout the world. Before a bank decides to give a loan to a customer, they project the customer’s ability to repay those funds, in addition to the customer’s credit rating and the expected financial reward the customer will enjoy from the loan.

Although in Ontario provincial legislation prohibits OSAP from refusing to finance students who have qualified for a post-secondary education institution, if OSAP would review the ability of the student to repay the loan, the expected spending power that will acquire after completion of their specific program, OSAP could assign a more reasonable and affordable loan to the student. This more prudent and observant manner of appropriating student loans would substantially reduce the number of students with massive loan debt that they will be unable to repay.

In conclusion, we have a system which lends students money seemingly without regard to repayment. When what could have been foreseen comes to fruition (i.e. there is not enough earning power for the student to repay their loan), one is not only faced with a crushing and impossible debt but also not allotted the mechanisms normally available to all Canadians with excessive debt (i.e. bankruptcy and proposals).

This is prejudicial. Why are graduated students unable to deal with excessive debt from the student loan system with the means normally allotted to assist Canadians with excessive debt? What differentiates student loan debt from other loan and credit transactions from the banks and others?

Bankruptcy as a process may appear as a convoluted legal procedure. However, many Canadians comprehend its availability and its basic application. In the eyes of some Canadians however, insolvency is viewed as unfortunate and regrettable, and the result of poor fiscal management or unforeseen circumstances. Nevertheless, insolvency exists in Canadian society from working class to business persons, all unfortunately burdened with unbearable and excessive debt loads.

Yet, among some new and ethnic Canadians the terms insolvency and bankruptcy can be perceived as a display of personal ineptitude and incompetence. Among numerous ethnic groups, bankruptcy and insolvency are very public statements revealing the inability for one to provide for themselves and their families. Furthermore, in tightly knit ethnic communities, the practice of lending money scarcely involves public lending institutions like banks; instead relying on simplistic intra-community loans.

However, when ethnic and new Canadians do engage with public banks, their lack of comprehension of strange new lending practices may lead them to accrue massive unbelievable sums of debt. From credit cards to loans, for new Canadians familiar with a much more informal and underdeveloped banking system in their ancestral homes, they are confounded by seemingly simple transactions. An example of this would be recent arrivals from Islamic states, which are governed by Islamic Law ("Sharia Law"). Under the banking laws imposed, interest bearing loans are particularly forbidden. The concept of interest may be a harsh new reality for numerous Middle-Eastern and Northern African recent immigrants undertaking their first loan in Canada.

When new arrivals unfamiliar with western fiscal transactions are saddled with excessive debt, their perceived options are altered due to their cultural stigma and lack of knowledge pertaining to bankruptcy and insolvency. Usually new Canadians in tightly knit ethnic communities consult more experienced and knowledgeable members of their communities for assistance and guidance. However, even this revelation only occurs after months of acrimony and the inability to provide for their family.

These tense times of unbearable stress, the result of frequent haranguing from creditors, take an immense toll on new Canadians rendering them scared, confused and isolated. A report commissioned by Doyle Salewski completed by Carleton University psychology professors illuminates this incredible ordeal which they call "Debt Stress." According to the report, the unique and traumatic effects of being burdened with excessive stress and the resulting threatening phone calls and letters lead to a myriad of self-destructive and often violent behaviour. Examples include: alcoholism, domestic violence and crime. While the report does not highlight ethnic Canadians, the effects of excessive debt must be aggrandized for them by their comparatively small amount of knowledge of the possible remedies. (Debt stress occurs to members of all nationalities.)

However, when ethnic Canadians decide to consult a debt counsellor like Doyle Salewski and their debt burden is either removed or significantly trimmed, ethnic Canadians are extremely likely to refer these debt counsellors to fellow community members. As this is the main manner in which those Canadians in tightly knit ethnic communities hear about such services, slowly but surely it assists in removing the cultural stigma surrounding bankruptcy and insolvency. A clear and simple description of the process by an accessible and warm debt counsellor comforts those burdened with excessive debt, while at the same time chips away at the negative mindset about bankruptcy.

In conclusion, in ethnic Canadian circles, bankruptcy and insolvency are perceived as admissions of failure as opposed to legal avenues of rehabilitation. The stigma prevents new Canadians from accessing valuable information and advice from experienced and knowledgeable debts counsellors, thus leading into a spiral of self-destructive and harmful stress induced behaviour. This can be alleviated by an awareness program introducing the options available to all Canadians experiencing unbearable debt.