Debt Settlement Calgary
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).

Negotiating your own settlement is possible — which is why some people search for “free debt settlement Calgary” or “personal debt settlement Calgary” — but it can be challenging; very challenging. A practical approach is to offer your creditors more than they’d expect to receive from your next-best alternative. For instance, if bankruptcy would likely yield about 17% of your debt repaid to your creditors, an offer of 30% could look reasonable. If your next best option would be to file a consumer proposal, then offering closer to 50% could be appropriate. We strongly recommend talking to one of our non-profit credit counsellors before making offers — they can assess your situation and estimate the most likely outcomes. They can let you know what your realistic best debt relief options are. If one of those options is a consumer proposal, they could estimate what one might end up settling for based on your specific creditors and your financial situation. If another of your realistic options is bankruptcy, they’ll let you know so you can consider that as well.

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 are not willing to negotiate directly with their customers or are difficult to deal with. We have relationships with over 20,000 creditors across Canada and have a good sense of how each major creditor typically responds. Based on this understanding and your specific situation, we can come up with the optimal way to approach each one of your creditors.
• We’ll be honest and straight-forward. If a settlement isn’t right for you, we’ll tell you. If the negotiations process reveals a better option, we’ll let you know.
• We’re not here to make money. Our goal is to help people.
• You only pay a fee if we successfully negotiate a settlement and receive written acceptance from your creditors. If you don’t like what we’ve negotiated, you can choose to not go through with it and do something else instead.
• When you use a non-profit credit counselling organization like ours, the negative credit impact after settlement only lasts two years, rather than the six years that comes with self-negotiated or for-profit settlements.

If you’re exploring debt settlement in Calgary, a conversation with one of our experienced credit counsellors is a smart starting point. Even if you decide not to settle, you’ll get clear, practical advice and a better sense of the best steps forward.