Debt Settlement Offers Are Not A Good Idea

Saturday, September 28, 2019 - 02:10

Consumer Proposals


Have you seen TV or online ads from companies claiming they can reduce your debts by up to 80%? Although these ads may seem appealing to you if you are struggling with debt, the promises they make are too good to be true.

No company can guarantee results when it comes to negotiating settlements with your creditors. When you signed your original credit agreements, you agreed to repay the debts with interest. So your creditors are under no obligation to accept anything less. Make sure you do your research before entering into a debt settlementagreement.

Debt settlement and credit counselling companies want you to believe that they can easily have your credit balances reduced and save you hundreds if not thousands of dollars. The problem is they cannot guarantee any results. They will require that you pay them monthly administration fees and/or a percentage of the settlement amount as payment for their services. But you need to read their documents very closely to find out what happens to all of those fees that you have paid if they are unable to reach agreements with some or all of your creditors.

If you are able to repay a portion of your debt, but not all of your debt, your best option is to contact a Licensed Insolvency Trustee and skip the debt settlement company. A Licensed Insolvency Trustee will negotiate a reasonable settlement, through a consumer proposalto help you clear up your debts. Unlike debt settlement and credit counselling company programs, which provide you with no legal protection or guarantee of results, a consumer proposal is a legally binding on all of your creditors as long as the majority of them accept the proposal (which they most often do). 

If you’re in debt, skip the middle-man and go straight to a Licensed Insolvency like Welker & Associates. We are here to help!

Latest Posts

Keeping your Savings with a Consumer Proposal

How does making a consumer proposal affect your TFSAs and RRSPs? With a consumer proposal, you get to keep your assets, which includes your tax free savings account and your RRSPs.

October 8, 2019

Consumer Proposals, Asset Concerns

Incorporated Companies and Debt

If your business is incorporated, then legally the business is a separate entity and its assets are owned by the business. In this case the incorporated company can go bankrupt if it cannot meet its financial obligations.

October 3, 2019

Business Concerns