How to debt settlement?

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To tackle debt settlement in Canada, start by identifying which unsecured debts, like credit cards, you want to settle. Collect your financial info, then decide to negotiate solo or hire a pro. If going solo, make an offer for a one-time payment and confirm all details in writing when agreed. Consider a trusted debt settlement company for guidance. Remember, settlements aren’t binding, and creditors may decline. Reach out via phone, text, or live chat if you have any questions. We can guarantee you the best solution.

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Debt Settlement Question

How to debt settlement? I need a simple explanation of how to go about settling my debts and what steps are involved in the process.

From: Anonymous Question
Location: Whitehorse, Yukon (YK)
Category: debt settlement

Debt Settlement Answer

To tackle debt settlement in Canada, begin by figuring out which debts you’d like to settle, usually starting with unsecured ones like credit cards and personal loans. Gather your financial info, and decide if you want to negotiate yourself or get a debt settlement pro involved. Going solo? Draft a proposal for a one-time lump sum payment and chat with your creditors. Once you strike a deal, make sure every detail is written down, and double-check that the debt is officially wiped clean.

If you’d rather have some help, consider reaching out to a trusted debt settlement company or credit counselor. They can guide you through the ins and outs and handle negotiations for you. Just remember, debt settlements aren’t legally binding, so creditors might not bite, and you might not be able to settle all types of debt. If questions pop up, don’t hesitate to contact through phone, text, or live chat.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

To settle your debts through debt settlement in Canada, follow these steps:

1. Assess Your Debts: Gather information on all your debts, including the total amount owed, interest rates, and creditor details.

2. Create a Budget: Analyze your income and expenses to determine how much you can afford to pay towards settling your debts.

3. Contact Creditors: Reach out to your creditors to discuss your financial situation. Express your willingness to negotiate a settlement.

4. Negotiate a Settlement: Propose a reduced amount you can pay to settle your debts. Be prepared to negotiate terms, and request that all fees and interest charges cease while negotiations are in progress.

5. Get Everything in Writing: Once an agreement is reached, ensure that you receive written confirmation of the settlement terms, including the amount to be paid and any waivers of remaining debt.

6. Make the Payment: Follow through with the agreed payment as per the settlement terms. Keep records of all payments made.

7. Monitor Your Credit: After the settlement, check your credit report to ensure that the settled debts are reported accurately.

Refer to the Bankruptcy and Insolvency Act for information on the legal framework surrounding debt settlement and any relevant regulations that may apply to your specific situation.

From: OSB Helper

Related Questions to Debt Settlement

Here are the top 5 most frequently asked questions related to debt settlement in Canada, along with brief answers:

1. What is a Consumer Proposal and how does it work?

A Consumer Proposal is a legally binding agreement between you and your creditors to pay a portion of your debts over a maximum period of 60 months, administered by a Licensed Insolvency Trustee[3][4][5].

2. What is the difference between a Consumer Proposal and bankruptcy?

A Consumer Proposal allows you to pay a portion of your debts without surrendering assets, while bankruptcy involves surrendering assets to a Licensed Insolvency Trustee to be discharged from debts[2][5].

3. How does debt settlement differ from debt consolidation?

Debt settlement involves negotiating to pay less than the full amount owed, while debt consolidation combines multiple debts into a single loan with a reduced interest rate and one monthly payment[2][4].

4. What types of debts can be included in a Consumer Proposal?

A Consumer Proposal can include most unsecured debts such as credit cards, bank loans, tax debt, and personal loans, but excludes court-ordered fines and student loans less than seven years old[3][4].

5. How do I qualify for a Consumer Proposal?

To qualify, you must be able to pay a portion of your debts, have total debts less than $250,000 (excluding mortgage, car loan, or investments), and be able to make monthly or lump sum payments[3][4].

If you have a question about debt see our debt questions or ask your own debt related question.

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