Debt Settlement

September 2nd, 2011 by Questions

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


One Response to “Debt Settlement”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

Now this is difficult to say for sure with the limited information that you provided. But with that level of debt, and likely a fairly high number of creditors involved, that makes debt settlement a little more difficult. The problem is that with multiple creditors you need more parties to come on board with the same offer, and in a debt settlement there is nothing that forces the creditors to vote as a body, they vote entirely based on self interest and you require every creditor to cooperate with the settlement offer. Unfortunately in practice this can make things very difficult.

That is one of the advantages of a consumer proposal (which is ultimately a court sanctioned debt settlement mechanism). The advantage of this process is that because it is legislated and supervised by the courts it is automatically binding on all creditors as long as you get the majority of your creditors on board with the consumer proposal. It is much easier to get a majority of creditors as opposed to all your creditors on board.

For more information on the consumer proposal the best thing to do is to contact a local trustee as they are the only parties in Canada that can currently administer a consumer proposal.

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