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While we all wish we could live our lives without having to take on any sort of debt, that isn’t realistic for many people in British Columbia and Canada in general. Especially if you live in high-cost cities, taking on debt for a home, car, or another necessary cost is normal.
While there is nothing wrong with taking on good debt that you can handle, the problems start to arise when you take on more debt than you can handle. If you are unable to pay back your debts on time, it can be expensive and very stressful.
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However, there is a way you might be able to get your debts taken care of in British Columbia and Canada, in general, without needing to fully pay them back and it is a debt settlement.
A debt settlement is when you make an offer to your creditor or lender to “settle” your debt for less than the original amount. While there is no guarantee the your lender in British Columbia will agree, if they do, you wouldn’t have to pay back the entire amount of the debt, but just an agreed upon amount.
So how does this work? Well, if you feel yourself struggling to stay afloat due to a debt, you (or a debt settlement company) can reach out to your lender in British Columbia and see if they would be willing to agree to a settlement. You will have to prove to them that you won’t be able to pay the full amount back and provide them with an offer.
However, if your lender or creditor in British Columbia has any inkling that you can, in fact, afford to pay back the full amount, they are unlikely to agree to your proposed debt settlement. As a result, your finances and credit score will likely need to be in really rough shape before a settlement is agreed to.
To learn the true cost of borrowing, check out this infographic.
While debt settlement is a good option for many people in British Columbia, it isn’t without its risks. These risks include:
As a result, you need to make sure it’s the right choice for you before you agree to it. However, how you do you know if it is right for you? Well, if any of the following describe you, then debt settlement might be for you:
So, before you sign anything or commit to any sort of debt settlement or program, you need to be sure to do your research and put a lot of thought into it.
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If you are on the fence about debt settlement vs. the other available options, don’t worry, you’re not alone. In an effort to help, we have decided to take a closer look at a few of the pros and cons of debt settlement in British Columbia.
Trying to negotiate a debt settlement on your own? Before you do, click here.
If you think you would benefit from debt settlement to take care of your debt once and for all, be sure to reach out to Loans Canada. We can help you navigate these negotiations and ensure you get your finances back on track.
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