It is a good idea to take stock of your finances every once in a while to figure out where you are at and to make sure you are on track to where you want to go. Oftentimes people will not take a hard look at their finances for several months or even years and then one day realize that they have a lot more debt than they thought they had and that they are far worse off than they ever meant to be. So what happens when you realize you need debt help? There are many options available out there to help a person get a handle on their finances, but which one is right for you? Debt settlement is one of those options and today we are going to take a look at what it is and what types of situations it will work for.
What is Debt Settlement?
Debt settlement is an option where a debtor works with their creditors and negotiates with them to have their total amount of debt reduced and then pays back only a portion of the original debt. This can also be done through a legal process called a consumer proposal and it is filed through a Licensed Insolvency Trustee. Once a proposal is filed and accepted by the creditors, interest will stop compiling. The lower amount of debt that is agreed on is then paid back in a monthly re-payment plan within 60 months or less.