Debt Settlement Québec
Essential Information

It entirely depends on your situation. On average, with bankruptcy people end up repaying about 17% of their debt. With a consumer proposal, a lot of people probably average repaying 40% to 60% of their debt, but with both bankruptcy and a consumer proposal, each results in a permanent legal record and terrible credit for 6 to 7 years after you finish the program. With a debt settlement, Canada has rules set by the credit reporting agencies that result in bad credit for 6 to 7 years if you negotiate the debt settlement yourself or through a for-profit agency, but this drops to only 2 years if you work with a non-profit credit counselling agency. So if you work with a non-profit credit counselling organization so that your credit is only negatively impacted for 2 years after the settlement and the settlement amounts negotiated are comparable to what you’d pay through a consumer proposal, then yes, a debt settlement could be worth it because your credit would bounce back sooner and you’d avoid a permanent legal record (which can impact employment opportunities for some people). If, however, you are trying to repay the absolute lowest amount possible on your debt, don’t care about your credit over the next 7 years, and don’t care if you go bankrupt, then filing for bankruptcy could be your best option (assuming your income isn’t too high and you don’t have valuable assets).

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 Quebec” or “free debt settlement Quebec.” 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, though, there are some key reasons we wouldn’t recommend doing a settlement on your own and why it’s probably better to work with a non-profit like us:

• 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 Québec, 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.