Is Debt Settlement a Suitable Option for You?

If you are experiencing problems paying your bills and you are solvent you may want to consider debt settlement.

Neither a consumer proposal nor personal bankruptcy is an option to persons who are solvent. You are solvent if you are able to pay your debts as they become due, or if your assets are worth more than all of your liabilities.

Unfortunately, many people having debt problems may not be able to obtain a debt consolidation loan either, or they cannot afford to repay a debt consolidation loan.

Debt settlement may be an option for you if you are solvent and a debt consolidation loan is not a suitable option for you.

Find out if you qualify for Debt Settlement

To find out if you qualify for debt settlement, please use the form below to explain your situation to our debt settlement expert, and he will get back to you with his professional opinion about whether or not a Debt Settlement Plan is the right option for you. This service is provided at no charge.

Hiring a firm to assist you with Debt Settlement

It is possible to hire a firm to assist you with debt settlement. Typically, a firm offering debt settlement services will require that

• you have a minimum of $10,000 in unsecured consumer debt (credit cards, personal loans, lines of credit, overdraft and utility bills), and
• you have some income or the ability to raise approximately 50% to 60% of the amount of your total debt within a three-year period.

If you hire a firm to provide debt settlement services you include specific unsecured creditors in a Debt Settlement Plan. You stop making any payments to these creditors included in your Debt Settlement Plan. Instead, you start saving money each month which is deposited into a 'debt settlement fund'. Over time the amount of money in this fund increases. At some point the debt settlement firm representing you will contact your creditors and attempt to negotiate favourable settlements, often at 30 cents to 50 cents on the dollar. Ideally, you will be able to obtain settlements with all of your creditors within three years of enrolling in a Debt Settlement Plan.

Debt settlement is not for everyone. If you do not pay some of your bills for two or three years it will have a negative impact on your credit rating. However, it is possible for a person to repair their credit rating over time. An individual who has enrolled in a Debt Settlement Plan can obtain a secured credit card so they can still have access to a credit card, something that is becoming almost a necessity in today’s world. There is also a possibility that an individual may be sued. However, it is still possible for you to negotiate a settlement with a creditor after you have been served with documents commencing a lawsuit - even after a creditor has obtained a judgment against you!

A person who successfully completes a Debt Settlement Plan will typically be able to eliminate all of their debt for approximately 50 cents on the dollar, this amount including both settlement costs and fees paid to the debt settlement firm. One of the major advantages of enrolling in a Debt Settlement Plan is that it usually means an individual can reduce the amount of money they are currently paying each month to selected creditors, and therefore result in an immediate improvement in their cash flow position.