Debt Relief Solution
Debt Settlement: Negotiate a Reduced Lump‑Sum
A negotiator asks creditors to accept less than the full balance, often via lump‑sum.
See safer alternatives first
We’ll compare settlement vs. proposal/DMP for your situation.
What It Is
What it is
- A negotiator asks creditors/collectors to accept less than the full balance, usually as a lump‑sum.
Advantages and Considerations
Advantages
- May resolve specific accounts for less if you have funds available.
Considerations
- No legal stay; calls/lawsuits can continue.
- Fees and possible taxable forgiven amounts.
- Credit damage from delinquencies and settlement notations.
- Some firms make misleading claims.
Eligibility Requirements
- Access to a lump‑sum; limited number of accounts; willingness to accept risks.
Costs & Fees
- Negotiated lump‑sum + company fees; ask about all‑in cost and timing before signing.
Credit Impact
- Missed payments and settlements can suppress scores for years.
Included and Excluded Debts
Understanding which debts qualify for this solution
Included Debts
- Some credit cards/collections; telecom/utility; personal loans (case‑by‑case)
Excluded Debts
- Secured loans; student loans; tax debts typically not settled via private negotiation
Compare Settlement vs Proposal/DMP
Enter your total unsecured debt to see cost, risk, and timeline differences.
!
We’ll never sign you up—only connect you with licensed or provincially regulated providers.Step-by-Step Process
- Build a settlement budget and prioritize accounts.
- Negotiate (get terms in writing).
- Fund the lump‑sum and confirm releases.
- Monitor credit files for accurate updates.
Preparation Checklist
- Breakdown of fees & when earned
- Whether you must stop paying (risk)
- How funds are held; cancellation rights
- Written proof of settlements
Timeline and Duration
- 1–6+ months: save a lump‑sum and negotiate; timelines vary by creditor
Alternative Solutions
- Consumer proposal (legal stay; reduces what you owe).
- DMP (interest relief; repay principal).
Is this a government program? No—there’s no OSB supervision and no legal stay.
Important Warning
If a company tells you to stop paying creditors while you save, understand the lawsuit/garnishment risk first.
Common Myths and Misconceptions
- Myth: All creditors accept 50% — Reality: Policies vary widely; some never settle.
Provincial Variations
Debt relief rules differ by province. Expand any province to see key details and service-specific notes.
Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland and Labrador
Nova Scotia
Ontario
Prince Edward Island
Québec
Saskatchewan
References
- FCAC: Debt settlement company risks: https://www.canada.ca/en/financial-consumer-agency/services/debt/debt-settlement-company.html
- FCAC consumer alerts: https://www.canada.ca/en/financial-consumer-agency/services/debt/debt-help/alert-debt-credit-repair.html
- OSB/CAIRP consumer alert: https://ised-isde.canada.ca/site/office-superintendent-bankruptcy/en/notices-licensed-insolvency-trustees/consumer-alert-struggling-with-debt-beware-of-debt-relief-scams