I have approx $35,000 in debit from Visa/Mastercard. Do I qualify for a plan?, how is it started, and does it effect my credit rating? Also will I still have access to my credit cards during/after this process? thanks Posted from: Ontario
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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.
A consumer proposal and personal bankruptcy are only available to those who are insolvent—people who cannot pay their bills as they become due.
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.
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:
Posted on Thursday, January 26, 2012
posted by Questions @ Does this include monies owed to CRA Posted from: British Columbia
Posted on Monday, January 23, 2012
I have informed Citi-Financial that I have entered into a contract with a debt settlement firm, they stated to me they will not deal with that firm and will garnish my wages, can they garnish my wages if I have already informed them that I have entered a debt settlement program or aqre they just [...]
Posted on Sunday, October 9, 2011
We currently have about $30,000 in credit card debt. We are looking at Debt Settlement (arbritation) I’m wondering how others went about finding a good Debt Arbritrator Company? there are SO many out there and most are based in the US, but claim to now do work in Canada as well. Has anyone been thru [...]
Posted on Friday, October 7, 2011
Why is there debt settlement and consumer proposals? Which is better to do? Can we do these options if one of two of us has lost their job? Posted from: Manitoba
Posted on Monday, October 3, 2011
If I am currently under bankruptcy, not yet discharged, and I have incurred personal debt to a ‘private’ individual for court proceedings unrelated to the bankruptcy, and the courts award me my court costs in settlement, does this money need to be repaid to the bankruptcy trustee??? Thx Posted from: Ontario
Posted on Wednesday, September 7, 2011
I have about $156,242.77 in credit card debt and included with this is a loan for some home improvements we had done which total $28,138.86 but it is in with the above total. Would I still qualify for a debt settlement? I would have about $2400 each month to contribute. Posted from: Ontario
Posted on Friday, September 2, 2011
I have about $286,120.89 in credit card debt which is not from personal spending but rather cash advances we had to put into our company to keep from going bankrupt at the time. I have about $2500.00 coming in each month to deal with this but it is not enough obviously. Do I qualify for [...]
Posted on Wednesday, August 31, 2011
Will CMHC settle with 20% of the owing debt. I have heard this from a few people Posted from: Alberta
Posted on Monday, July 25, 2011
im going through a divorce and could possibly end up with 46000 dollars worth of debt. i bring home 2200 a month, this debt doesnt include my car that i have monthly payments on. I’m struggling very much with with all the debt at the end of the month. i am left with approximately 900 [...]
Posted on Monday, June 13, 2011
