Debt Settlement: Everything You Need to Know

Demystifying Debt Settlement in Canada: Your Path to Debt Relief and Financial Freedom

1. What is debt settlement, and how does it work in Canada?  Debt settlement is a professional service provided by debt advisory firms in Canada. It involves negotiating with creditors to reduce the amount of debt owed by the debtor. Debt consulting companies will provide professional consultants and negotiators for debtors and creditors to negotiate debt settlements, generally speaking, the settlement can exempt the debtor by 40% to 60%.
2. Can all types of debts be settled through debt settlement in Canada? Debt settlement is typically used for unsecured debts such as credit card debts, personal loans, and medical bills. Secured debts such as mortgages or car loans are generally not eligible for debt settlement.
3. How long does it take to settle a debt in Canada? The timeframe for debt settlement varies depending on the debtor’s financial situation and the amount of debt owed. Debt settlement can take several months to a few years to complete.
4. Will debt settlement impact my credit score in Canada? Yes, debt settlement can negatively impact your credit score in Canada. However, the impact may be less severe than filing for bankruptcy.
5. How much does debt settlement cost in Canada? Debt settlement companies typically charge a fee based on the amount of debt being settled, which is usually a percentage of the total debt. It’s important to understand the fees associated with debt settlement and to make sure they are reasonable and transparent.
6. Can I settle my debts on my own, or do I need a debt settlement company in Canada? While it is possible to settle debts on your own, working with a debt settlement company in Canada can provide valuable expertise and negotiating power that can increase the chances of a successful debt settlement.
7. Will creditors agree to debt settlement in Canada? Creditors are not required to agree to debt settlement, but many are willing to negotiate a settlement if it means they will receive some payment rather than none at all.
8. What happens if a debt settlement agreement is not reached in Canada? If a debt settlement agreement cannot be reached, the debtor may need to consider other options such as debt consolidation or bankruptcy.
9. Can I continue to use my credit cards while going through debt settlement in Canada? No, it is generally not recommended to continue using credit cards while going through debt settlement in Canada. It’s important to focus on paying off existing debts and avoiding additional debt.
10. Will debt settlement stop collection calls and legal action in Canada? Once a debt settlement agreement has been reached, collection calls and legal action should stop as long as the debtor adheres to the terms of the agreement. However, until an agreement is reached, creditors may continue to pursue legal action.

Take control of your debt today and pave the way to financial freedom. Contact us now to explore debt settlement options and find the best solution for your financial situation.