Despite what you might think, those in Toronto actually carry a relatively low amount of debt compared to other major cities in Canada. However, while their overall debt load is lower than average, it is climbing. In fact, statistics show that debt levels are increasing in Toronto more than nearly anywhere else in the country.
Because incomes in the Toronto are relatively high, many can handle a growing debt load, but this isn’t true for everyone. There are plenty in Toronto who are struggling with debt and for many of these people, the solution they need could be debt settlement.
Read this to learn how you can negotiate a debt settlement on your own.
What is Debt Settlement?
Debt settlement is where a borrower will offer to settle their debt for less than the total amount. For example, if you owe $10,000 to a lender in Toronto, you might offer to settle the debt for $6,500. If accepted, you will make the agreed-upon payment and the debt will be marked as paid. While a lender in Toronto isn’t required to accept the deal, it might be better for them to take something rather than get paid nothing back at all.
To learn how to create a debt repayment plan, check out this infographic.
What to Expect from Debt Settlement in Toronto?
If you think a debt settlement might be right for you, it is a good idea to familiarize yourself with the process so you know what to expect. The first thing to do is find a debt settlement company in Toronto to work with. It is wise to speak to a number of different debt settlement agencies in Toronto to ensure you find one you are comfortable working with.
Once you have found your company, you need to work closely with them to come up with a suitable offer. Your offer needs to not only be one that is good for you, but also one that is likely to be accepted by your lender in Toronto. You also need to make it clear that you are unable to realistically pay back the loan in full.
While it is possible to prepare and offer a settlement offer that you have crafted yourself, this is not advised very often. Working with a professional will give you a higher chance of success, so think long and hard before you decide to do it yourself.
Looking for another way to conquer your high-interest consumer debt? Find one here.
Questions to Ask a Debt Settlement Company in Toronto
While we briefly touched on choosing which debt settlement company to work with in Toronto, it is a very important decision and you need to really be sure of the company you work with. Their expertise and experience could be the reason why you do or do not get your settlement accepted.
In order to compare and vet the different companies you speak with it, it is a good idea to have a few questions to ask them. These questions include:
How Long Have You Been in Business and What is Your Experience Like?
Of course, when trying to get a debt settlement accepted, you want to work with an experienced company in Toronto. New companies can be good, but generally, you should work with companies who have been settling debt for years and have consistently delivered good results.
What Do You Charge?
While it isn’t the most important thing, it is a good idea to find out how much a company charges before you start working with them. Each company will charge a different amount and will offer different deals. Without doing your homework and research, you might end up spending more than you needed to or want to.
How Long Will My Debt Settlement Last?
While no company can give you an exact answer on how long a debt settlement will last, they can give you an idea. The amount of time will depend on the company themselves and how quickly they can work, how much debt you have, and how much you are settling for.
Check out more questions that you should ask a debt settlement company.
Secured vs. Unsecured Debt
However, before settling your debt, you need to be aware of something. Secured debt cannot actually be included in a debt settlement in Toronto or any other city in Canada. For those unfamiliar with it, secured debt has been secured by an asset, like car loans and mortgages. These loans have collateral, so if you miss payments on a car or house, your Toronto lender has the option of taking possession of them and selling them to recoup some of the money they lent.
As a result, these debts cannot be settled because if you default on the payments, the lender could seize the asset. On the other hand, unsecured debt, like credit cards and personal loans, can be included in a debt settlement as they are not backed by any collateral.
Debt Settlement That Works For You
Debt settlement is a common and popular way of easing the burden of your debt. If you would like to learn more, be sure to reach out to Loans Canada for assistance.
