Selling debt solutions to an uninformed public

November 17, 2011 by
Filed under: Bankruptcy, Debt Management, Information Seminar 

Every marketer needs to ask the critical question, “What’s in it for the consumer?” Toothpaste manufacturers know people don’t pay for toothpaste; they pay for either white teeth or cavity protection. Car dealers know people don’t buy cars, they buy a safe mode of family transportation or an image (wealth, muscle, or beater).

Likewise, every critical consumer needs to ask the critical question, “What’s in it for the advertiser.”

Specifically, I am refering to some advertisements I recently saw that were offering “Rapid Debt Relief” boasting no interest and low payments. The ad includes the byline “There is a Special Government Legislation that allows you to reduce your DEBT by up to 100%”. They call themselves “Debt Restructuring Consultants and, at the very bottom you’ll see that they are Trustees in Bankruptcy.

Their marketing is beautiful. They clearly know the WIIFM (“what’s in it for me”) of their clientele: Debt relief, elimination of 100% of debt.

If you spin it around and start looking at the WIIFM of the organization, you’ll become aware that they are very much like a spouse’s lawyer trying to sell the other spouse on coming to them for divorce-settlement advice.

Here are a few facts worth knowing before getting caught up in their spin:

  1. The “Special Government Legislation” is no big secret, and no big deal. They are referring to the Bankruptcy and Insolvency Act, which you can access yourself here, and you can find out more in plainer English here.
  2. Trustees are a mandatory funnel for bankruptcies (up to 100% debt elimination) and proposals (up to 70% debt elimination). If you are planning to go through the process, you will ultimately have to go through a Trustee. So shop around.
  3. A Trustee’s income is dependent on how many assets they seize and convert into cash. Their income is in part commission-based. The more they assets they squeeze out of a bankrupt person, the more they earn.
  4. Trustees typically earn more from a proposal than from a bankruptcy.

Their spin is designed to appeal to your internal panic. There’s nothing wrong with that. That’s how businesses work. Just like a car dealer will convince you that this particular special is only good for the next twenty minutes and that there are two prospective buyers ahead of you, the Bankruptcy Trustee want to tap into you panic and get you to see them, NOW.

(See here for some basic marketing spin rules, and grow your awareness when these tactics are being used on you.)

There is nothing wrong or illegal about seeking advice on how to manage your representation to a Bankruptcy Trustee. What is wrong (but not illegal) is to trust the Trustee to make a recommendation based exclusively on your best interest. They too are mere humans. They too are interested in receiving the maximum amount of income for their efforts.

You may be panicked. You may have this impending sense of “now or never.” You owe it to yourself to step back, get the information and the education that will allow you to make a fully formed decision on what you should do next. On what is best for you.

There are a lot of WIIFMs revolving around you right now. The bank’s, the government’s, any other creditors, the bankruptcy Trustee’s, debt consultant’s, credit counsellors, and the list goes on.

Stop.

Take a deep breath. And commit to giving yourself a month of two to start figuring out what is really in YOUR best interest.

It’s your future, and the future quality of your life depends (partially, but not entirely) on what you do now. So take the time to get all the information you need to do what’s best for YOU.

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