What is the Cost of Debt Settlement?

How Much Does Debt Settlement Cost?

When struggling with substantial debt, it’s common to explore various debt relief options. However, a significant concern for many individuals is the associated cost. What is the Cost of Debt Settlement? you might ask. This article aims to shed light on this crucial aspect, helping you make an informed decision.

The Inevitable Cost

One critical thing to note is that no debt relief option is devoid of ramifications. Be it debt consolidation, a consumer proposal, or any other debt solution, a price tag is attached. Nevertheless, certain debt relief methods are less expensive than others.

Debt Settlement: An Economical Option

A debt settlement program often emerges as a less costly alternative in the long run, compared to a consumer proposal or bankruptcy. This is why many individuals grappling with substantial debt opt for debt settlement to square things off with their creditors.


Get Your Free Consultation With a Licensed Debt Relief Expert Now!

Find out how you can quickly get out of debt by setting up a free consultation with us today.

Get out of Debt and have family bliss and happiness

The Cost of Not Opting for Debt Settlement

There are two ways to consider the cost of debt settlement. The first is the cost associated with not choosing debt settlement, which arises when you ignore your debt or select another debt relief option. The costs of inaction can be significant.

1. Emotional Toll

Carrying a huge debt burden can adversely impact your mental well-being. The persistent calls from bill collectors and creditors only exacerbate the situation. The emotional cost escalates if you postpone debt settlement, ultimately being forced into a credit-damaging consumer proposal that may be declined by your creditors, leaving bankruptcy as your only recourse.

2. Late Fees and Interest

As you procrastinate on choosing a debt relief option, late fees, and interest charges pile up. These are added to the principal, resulting in interest accumulation on interest. This inflates your debt balances, and you end up paying more to settle your debt if you eventually opt for debt settlement.

3. High-Interest Rates on New Debt

Delayed payments and high unpaid debt amounts make you a high-risk candidate for new creditors. If you leave your debt unsettled, you will be charged a high-interest premium on new loans.

Discuss options to get out of debt with a trained & licensed debt relief professional.

The Cost of Opting for Debt Settlement

Regardless of how it’s negotiated, debt settlement is associated with costs. However, these costs are marginal compared to the costs of inaction or choosing a more drastic debt relief option:

1. Program Fees

Typically, a debt settlement plan has some fees attached. These fees are based on the amount of debt to be settled, your geographical location, and the duration of the settlement program. Generally, you save money compared to credit counseling because although credit counseling lowers your interest rate, your principal total remains the same. Consequently, you wind up paying more to clear your debts than you would if you settled them for less than what you owe.

2. Credit Score Implications

The impact on your credit score is another cost associated with debt settlement. However, it’s far less damaging to your rating than a consumer proposal or bankruptcy. A reputable debt settlement company will negotiate with your creditors and push to get them to write off the unpaid portion of your debt in a manner that inflicts minimum harm to your credit score.

Learning More About Debt Relief

The most effective way to comprehend the actual cost of a debt settlement program is to have a personal consultation on all your debt relief options. You can fill out the debt relief form for more information.


Evaluating the cost of a debt settlement program is crucial when dealing with substantial debts. Understanding how much does debt settlement cost, its implications, and comparing it with other options can help you make an informed choice. Remember, the cost of inaction can often surpass the cost of taking the necessary steps towards debt relief.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Legally Cut Your Debt By 80% And Stop Interest Charges

Stop Interest Charges Immediately
Unfreeze Bank Accounts
Stop Wage Garnishment
Stop Legal Actions

I was feeling overwhelmed by my credit debt, constantly receiving calls and letters from debt collectors, which caused a great deal of stress. It seemed like there was no way out of this situation. However, I discovered Bankruptcy Canada while listening to my local talk radio station. This organization proved to be friendly, empathetic, knowledgeable, and professional, with extensive experience in their field.

During our initial meeting, they took the time to understand my debt and financial circumstances. They explained the various options available to me and helped create a personalized plan that would be most beneficial for my situation. With their assistance, I was able to avoid declaring bankruptcy by presenting a consumer proposal to my creditors. Fortunately, my proposal was accepted, and I am extremely relieved to finally be free of debt, all thanks to BankruptcyCanada. The burden on my shoulders feels significantly lighter now, and I truly believe that Bankruptcy Canada has the most skilled specialists in debt relief.



Costs of Debt Settlement

If you are struggling with debts that you cannot afford to pay, you need to start looking into debt relief options, like debt settlement.

However, many people worry about the cost of debt settlement and when you are already in a difficult financial position, adding more costs for debt relief is the last thing that you want to do.

But it’s important to remember that, even though you will incur costs, debt relief can help you to finally start making progress with your debt repayments.

When calculating the cost of debt settlement, there are a few ways to look at it; you need to consider the cost of entering debt settlement compared with the long term cost of not entering debt settlement.

It is important to remember that no debt relief option is ever going to be cost free, although debt settlement is more affordable than bankruptcy or a consumer proposal.

Need Help Reviewing Your Financial Situation?
Contact a Licensed Trustee for a Free Debt Relief Evaluation

Call 877-879-4770


The Cost Of Not Entering Debt Settlement

If you decide to carry on as you are and try to pay your debts down, or you decide to opt for a different kind of debt relief, it is likely to cost you a lot.

The cost of doing nothing is almost always higher than the cost of debt settlement.

These are some of the main costs of not entering debt settlement.

Emotional Cost

Before you consider the financial cost, it is important to recognize the emotional cost.

If you are looking into debt relief options, you already know how stressful it is to be in a lot of debt.

Money worries are one of the most common causes of stress and relationship issues, so the emotional cost of not entering debt settlement can be huge.

Interest and Late Fees

The cost of debt settlement is always going to be lower than the cost of interest and late fees on debts that you cannot afford to repay.

The longer you avoid debt relief, the more interest you will pay and the more late charges you will build up.

The interest compounds on the total amount owed, which means you are charged interest on interest and it becomes harder and harder to pay the debt off.

Over time, the difference between the cost of debt settlement and the cost of paying off the total debt will be very significant.

But if you opt for debt settlement early, you can save a lot of money.

The Cost of New Loans

Even after you pay off your debt, your credit rating will still be very poor.

If you ever need to borrow again in the future, the interest rate on those new loans will be incredibly high.

However, if you opt for a debt settlement option and pay your debts off faster, you can improve your credit score and get better rates on any new loans.

The Cost of Debt Settlement

Although the cost of debt settlement is a lot lower than the cost of inaction, it is still important that you consider how much you will need to pay.

Program Fees

The majority of the cost of debt settlement is made up by the program fees.

The fees are dependent on the amount of debt that needs to be settled, which province or territory you live in, and the length of time that you are in the debt settlement program.

Regardless of the cost of debt settlement, you will almost always save money in comparison to other debt relief options, like credit counselling.

With other debt relief options, the principal amount is the same, but when you opt for debt settlement, you will pay a lower amount as agreed with your creditors.

The cost of debt settlement is also lower than bankruptcy because you will not have to give up any of your assets.

Credit Rating Issues

Your credit score is always going to be negatively affected by debt relief, but when you opt for debt settlement, the impact is a lot lower than it would be with other debt relief options, like a consumer proposal or bankruptcy.

As long as you go with the right debt settlement company, they will negotiate with creditors and reduce the impact on your credit rating as much as possible.

Find Out More About Debt Settlement

Every case is different, so the only way to know for sure what the cost of debt settlement will be for you is to get in touch with a debt settlement company and have a consultation.

You can call us today or fill out an evaluation form to find out more about debt settlement.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

Need a Licensed Insolvency Trustee?

Licensed Insolvency Trustees Near Me