Debt Settlement Ottawa
Essential Information

It depends on your priorities and your financial situation. Generally, bankruptcy results in creditors being repaid an average of 17% of the debt owed to them, while many consumer proposals lead to repayment in the range of 40%–60%. However, both bankruptcy and consumer proposals carry a permanent, legal record and will hurt your credit for approximately 6–7 years after the process ends.

If, on the other hand, you complete a debt settlement (Canada-wide) through a non-profit credit counselling agency, the negative effect on your credit is a lot shorter — just two years. This compares to six years when you negotiate yourself or use a for-profit company. So, a debt settlement can be an attractive option if you do it through a non-profit like ours, achieve results similar to a consumer proposal, and your credit bounces back 4 years sooner — and you avoid a court record. However, if minimizing the total amount of debt you repay is your primary concern and you don’t mind long-term credit damage, bankruptcy might be a preferable route (that is if your income isn’t too high and you don’t have assets that your creditors would be interested in selling to repay your debt).

If you’re looking to negotiate with your creditors and settle your debts on your own, this is possible. It’s one reason why you’ll see searches for “personal debt settlement Ottawa” or “free debt settlement Ottawa.” But this isn’t something we recommend people do. If, however, you are dead-set on negotiating yourself, then the way to approach the situation is to offer your creditor more than they’d get if you went for the next best alternative. So if you’re seriously considering bankruptcy and you might just have access to a lump sum of money that could pay out say 30% of your debt, then this could be an offer that you could present to your creditor. If they only expect to get 17% from you in bankruptcy (an average amount), then offering them 30% could sound like a better deal for them. If you weren’t considering something this drastic and instead were considering filing a consumer proposal, then offering your creditor 50% of the value of your debt might make more sense. Before you do any of this, though, we would strongly recommend that you first speak with one of our non-profit credit counsellors. They can help you assess your situation and let you know what your realistic best debt relief options are. If a consumer proposal is an option for you, they could estimate how much one of those might end up settling for based on your situation and your specific creditors. If bankruptcy is truly an option for you, they’ll let you know that too.

In the end, here’s what we would say are some of the key reasons why we wouldn’t recommend trying to do a settlement on your own and why it’s better to work with an organization like ours instead:

• Some creditors won’t negotiate with individuals or are very tough to work with. We have relationships with over 20,000 creditors across Canada. We have good relationships with major creditors and know how they are most likely to respond to different scenarios. We can come up with the optimal way to approach each of your creditors based on your unique financial situation.
• We’ll be upfront, honest, and transparent with you. If settlement isn’t your best path, we’ll tell you. If through the negotiation process we see that another option is better, we’ll let you now.
• We don’t do this to collect fees. We do this to help people.
• You only pay us if we successfully negotiate a settlement and you receive written confirmation. If you don’t like the settlement amounts we negotiate, you can walk away with no obligation and pursue another debt relief option.
• If you negotiate on your own or work with a for-profit company, your credit will typically be affected for about six years after the settlement takes place. If you work with a non-profit credit counselling organization like ours, the negative credit impact lasts only two years.

If you’re looking for the best debt settlement in Ottawa, speaking with one of our experienced credit counsellors is a great place to start. At the very least, you’ll learn a whole lot and have a much better idea of how to move forward.