Ontario Debt Settlement Lawyers
When people face extraordinary financial circumstances, they get scared. They think bankruptcy is the only answer, and for many, there is stigma associated with bankruptcy. They want to avoid it at all costs.
If you are dealing with massive debt and earn regular income, you may not have to choose bankruptcy. You may be able to resolve your debts through a process called debt settlement. Also called debt negotiation, debt settlement allows you to reduce the amount of debt you owe a creditor. This is based on an agreement made between yourself (the consumer) and a creditor.
However, a debt settlement often requires you to have a large amount of money upfront to give to the creditor. Contact the Ontario debt settlement lawyers from Wadhwani & Shanfeld to find out what else you should know about negotiating your debts.
Benefits of Debt Settlement
Here are some reasons to choose debt settlement:
- Avoid bankruptcy. Bankruptcy should be a last resort. If your creditor agrees to your debt settlement offer, you can avoid having to go through bankruptcy, which can affect your assets and credit score.
- Avoid collections. If you can get your debt settled quickly, you’ll avoid having your debt sent to collections. This means you won’t be harassed by constant phone calls from creditors, giving you peace of mind.
- Repay debt faster. Sometimes a creditor will settle for much less than the balance owed. They may even allow you to pay less than 50% of the balance. This will help you repay the debt faster.
Downsides of Debt Settlement
There are some cons to debt settlement, including:
- Lowered credit score. Settling a debt for less than what is owed is not a good sign. It can cause your credit score to drop temporarily.
- Payments need to be in lump sums. Sure, you could negotiate your $10,000 debt down to $5,000, but do you have that much money on hand? Debt settlement often requires a lump sum amount. The creditor does not want to risk payments on a reduced balance, so you’ll need to have some savings on hand.
- Creditors could refuse to negotiate. There are no guarantees when it comes to debt settlement. Creditors are not obligated to settle your debt for less than what you owe. While many do to avoid the possibility of you going bankrupt and not getting anything, if you are making minimum payments, there is no reason for them to negotiate.
Contact Wadhwani & Shanfeld Today
Debt can quickly become overwhelming, but there are options to get it under control. Debt settlement may be a good option if you have a good sum of money saved up to pay off your balance.
At Wadhwani & Shanfeld, we work hard to get your finances under control and make debt more manageable. Schedule a consultation with our experienced Ontario debt settlement lawyers today by calling (800) 996-9932.
