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Can I settle at a lower amount using cash?

I have about 20000 in credit card debt. I`m not able to keep up the monthly minimum payments. I recently discovered I can borrow about 8000 from some life insurance policies at low interest. Could I settle the debt for that?

Posted from: Ontario

One Response to “Can I settle at a lower amount using cash?”

A licensed trustee said...

Maybe – there are a couple of approaches you might try. If you are a good negotiator/talker, you might try contacting each of your debts yourself and offer them a lumpsum settlement. Based on what you’ve written, it would be for 40% of the debt. They will want to know about your income, any other assets and living situation. If the deal makes sense they will agree. If it doesn’t they won’t.

If you don’t think you can do this yourself you might hire a lawyer to try and arrange the settlement. Of course they will charge a fee for their services…

Or you might consider a consumer proposal. To file a proposal you must be insolvent (ie unable to repay the debnt in full). If you simply don’t want to repay the debt in full (but you could) then a proposal isn’t for you.