When dealing with your debts, it is very important to weigh the pros and cons of different debt relief options that are available to you. Here are some questions to ask you in order to help you clarify the situation:
- Am I willing to damage my credit rating in order to end the debts?
- How long am I willing to follow a debt settlement program until my debts are settled?
- How much am I willing to spend on such a program?
If you are considering a debt settlement because you are tired of being harassed by debt collection agencies or simply because you can not afford to repay your debt in full, you must first know if you qualify or not.
Understanding debt settlement
In Canada, there are many options for debt relief. In parallel with the debt settlement, there is the financial follow-up, the debt consolidation and the consumer proposal, just to name a few. Payday loan consolidation is an option for people in a very particular financial situation- great site.
In other words, debt settlement programs are designed for those whose debt is so severe that they no longer qualify for debt consolidation or financial tracking. On the other hand, your debt is not serious enough to be the subject of a consumer proposal or to declare bankruptcy. In general, debt settlement is better suited for those with less than $ 10,000 unsecured in consumer debts.
Other issues and qualifications for debt settlement
Although there is an approximate amount of debt that makes you eligible for a debt settlement, your total debt level does not dictate exclusively whether it is the right option for you or not. Here are some other relevant factors:
Obviously, your income is very important because it allows you to make payments on your existing debt. In general, if you are not able to make at least the minimum payments on your debt, at this point you should declare bankruptcy. Fortunately, these laws are not cast in the concrete and each situation is different. Even if you still can not make your debt payments, you could still qualify for a debt settlement program.
The amount of your savings or the active capital of your assets can work in your favor for a debt settlement. Know that most creditors ideally prefer a debt settled by lump sum payment, if possible. For example, if you have a few thousand dollars in an unrestricted account (such as a retirement savings account), debt settlement could be a very good option for you.
The outcome of your debt settlement may differ depending on the creditors you work with and the history you have with them. The chances are that if you have dealt with a specific creditor in the past, the negotiations will be more favorable.
Qualify or not
That being said, there is only one way to know if you will qualify for debt settlement or not: just contact a professional for a free consultation. From there, you will complete the debt relief form and you will be able to know which option is the best for you.