While you are trying to narrow down your debt relief options, there are many factors to keep in mind. Ask yourself:
- How long do I want to be in a debt relief program before my debt is paid off?
- How much in program fees am I willing to spend?
- How negative of an effect on my credit score am I willing to tolerate in order to get out of debt?
Answering these questions will go a long way to helping you decide on the best debt relief option for your situation.
The most important question is, of course, whether or not you meet the qualifications for a specific debt relief option. Let’s start with: Do I qualify for debt settlement?
Understanding Debt Settlement
Debt settlement is one of many legal Canadian debt relief options. Others include debt consolidation, credit counselling, the consumer proposal and others. A debt settlement program is designed primarily for those who are deeply in debt and are not good candidates for debt consolidation or credit counselling, but who are not in a serious enough financial situation that a consumer proposal or bankruptcy is the best option either. Debt settlement is typically more appropriate if you have at least $10,000 in unsecured consumer debt.
Other Factors that Qualify You for Debt Settlement
As you might expect, your total debt level is not the only factor when assessing whether or not debt settlement is right for you. Other factors include:
• Existing Savings—Because most creditors like to settle for a single lump sum, the amount that you have in savings and other liquid assets can help determine whether debt settlement is the best option for you. If you have several thousand dollars in an account that is not designated for retirement, debt settlement may be an excellent solution in your situation.
• Income—Your ability to make any payments on your existing debt is also extremely important. If you do not make enough currently to make even the minimum monthly payment on just one of your debts, your only solution may be to file for bankruptcy. Still, each situation is different, and you may qualify for a debt settlement program even if you cannot make any of your payments right now.
• Specific Creditors—The specific creditors to whom you owe money also affect your situation. If your debt settlement provider has previously worked with your institution, the odds are higher that they will negotiate successfully on your behalf.
There’s Only One Way to Know for Sure
Ultimately, there is only one way to know for sure if you qualify for a debt settlement program, and that is to contact a professional for a free consultation. Fill out the debt relief form for more information.