What is Debt Settlement?

Understanding the Concept of Debt Settlement

Debt settlement is a concept that has been thrown around in various advertisements, promising you a way to clear your debts for less than what is owed. This might have raised your eyebrows in suspicion, but you’d be relieved to know that debt settlement is a legal and legitimate method to resolve your debts. If you are eligible for a certified debt settlement program, it can be the optimal solution to save you money, get you debt-free, and avoid credit-damaging debt solutions like consumer proposal or bankruptcy.

The Basics of Debt Settlement

Let’s dive into the foundational concept of debt settlement. The idea isn’t complex to grasp. You employ a debt settlement company to negotiate with your creditors. A proficient debt settlement company can convince your creditors to consider your debt as fully paid for less than the original amount. This not only saves you money but also simplifies your debt repayment process.

After enrollment, you stop paying your creditors and instead start building a debt settlement fund. This fund accumulates into a lump sum that is given to your creditors once your debt settlement is approved. Post the signing of the settlement agreement and dispersal of funds, your debts are considered paid.

Note: Debt settlement can drastically cut down your debts. Creditors may agree to settle for less than forty cents on the dollar, reducing a $10,000 debt to a $4,000 debt.


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

Debt Settlement Vs. Other Debt Relief Options

Debt settlement isn’t your only escape route when you’re drowning in debt. Multiple other options exist, and it’s crucial to weigh these against debt settlement.

  1. Impact on Credit Report: Several debt relief choices can severely damage your credit report. Personal bankruptcy and consumer reports can linger on your credit history for about seven years, greatly hindering your ability to qualify for new loans.
  2. Suitability for Solvent Individuals: Debt settlement is tailored for those who are solvent and have a fair chance of getting out of debt within the standard duration of most debt settlement programs. If you can’t reasonably save up your lump-sum credit payment within three years or less, you might be better off with another debt solution such as debt consolidation.
  3. Applicability for Large Debts: If your total consumer debt surpasses $10,000, debt settlement could be a good choice. Opting for consumer credit counseling or debt consolidation can be more cost-effective if your debt is less than $10,000.

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

Choosing a Debt Settlement Company

A competent debt settlement company can accelerate your journey to becoming debt-free. If you’re burdened with substantial consumer debt but are averse to filing for bankruptcy or completing a consumer proposal, fill out the debt relief form for more details on your debt relief alternatives.

Always be certain before hiring a debt settlement company. It’s crucial to make an informed decision that will help you regain financial stability and peace of mind. Remember, “What is Debt Settlement?” is a question that requires thorough understanding and careful consideration before diving in.

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.