I am wondering if we would qualify for debt settlement. My husband and I make 110,000 in salary before tax. Our home is worth 260,000 and our mortgage is at 203,000. We have 35,000 in cc debt, owe 6,000 of income tax, 23,000 loan and 74,000 loan. We have 15,000 in resp saved for our […]
Debt Settlement in Canada
What is Debt Settlement ?
Debt settlement is a service in Canada to help individuals who are experiencing financial distress, and is an alternative to bankruptcy.
Debt settlement might be appropriate for you if you meet the following three criteria:
- You are solvent;
- You have more than $10,000 in unsecured consumer debt;
(do not count mortgage loans, car loans or student loans);
- You have an income or the ability to raise some money.
Debt settlement may be particularly attractive to those with a poor credit rating or individuals who will not be borrowing large sums of money in the next five or six years.
How debt settlement works
You can hire a firm to do debt settlement work on your behalf. Learn more about your options at Debt.ca.
During the first few months you enroll in a debt settlement plan you will not make any payments to selected unsecured consumer creditors. During this initial phase you will be saving money that will be set aside to build your ‘debt settlement fund’. With the passage of time (1) the amount of money in your debt settlement fund will grow and (2) your creditors will become increasingly willing to accept lump sum settlements from you, typically between 30 cents to 50 cents on the dollar when an account has been in default for 24 months to 36 months. After several months your debt settlement firm will contact your creditors and attempt to negotiate very favourable lump sum settlements.
To ask a question about debt settlement in Canada:
- Post an anonymous question about debt settlement to our blog.
The latest debt settlement questions, with our experts' responses:
Hi, my parents were visiting us here in the US, while here my dad suffered a heart attack, and was hospitalized and incurred significant hospital debt. The bills have been coming in and total about $150,000 US. We are trying to negotiate with the hospitals, however it seems some have not been patient and have […]
I have debt owing to Bell and Visa. I have no assets, ie no car and live at parents. I am now on disability but owe money to Bell just under $1,000 and credit cards for $12,000. The collection agency is threatening to take legal action. Can they take my disability to pay for this […]
Hi, I currently have a mortgage of 375K and my house is worth 430K. I owe 50K in unsecured loans and credit card debt. Am I eligible for a consumer proposal? My currently income is 100K. I don’t want to go into bankruptcy. or is it better to talk to each creditor and ask for […]
If I file bankruptcy does it mean I am acknowledging the list of my creditors and debt owed? What if I do not agree to one creditor’s claim and want to fight this creditor. Should I exclude or include their amount claim, since it was the largest debt I have against me and prompted my […]
In entering a debt management plan with a credit counsellor, can RRSP’s / GIC’s and chequing/savings accounts be taken by the creditors? Also, if there is a joint chequing account, can this be seized without asking or does the creditor have to ask the individuals listed on the account? Posted from: Ontario
I lost my job and at 58 i’m finding it hard to find another. my wife has a very good job. between the 2 of us we have acombined credit card debt of approx. 77,000.00. Do we qualify for debt settlement? PS: we have never missed a cc payment but are now barely able to […]
Can a credit card company refuse to be part of the debt settlement by refusing to take what is offered? Posted from: Ontario
I owe $26,000 on the 407 toll route which I have not used in over a year ,does going bankrupt erase this debt so I can get a valid plate sticker for my car Posted from: Ontario
I have outstanding debt overseas. Can an overseas creditor come into Canada and take legal action against me – i.e. garnish my wages, take away my home? Posted from: Alberta