Unfortunately, Halifax is currently experiencing some of the highest levels of debt delinquency in the country. Thankfully, if you live in Halifax and are struggling with keeping up with your payments or dealing with your debt load, there are debt relief options at your disposal. One of the most popular and useful is debt settlement.
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How Debt Settlement Works in Halifax
A debt settlement in Halifax is when you make an offer to partially pay back your loan to your lenders. For example, if you owe $10,000 to a lender, you might offer to settle this debt for $6,000 instead. Now, the lender isn’t required to take your deal, but sometimes it is in their best interest to do so.
See, you’ll only offer to settle debt when you feel you will never be able to reasonably pay back the entire amount. And most lenders would like to recoup some of their money instead of none of it, so they might be willing to accept your offer.
How to Get Started With Debt Settlement in Halifax
So how do you begin the process of completing a debt settlement in Halifax? Well, the first thing to do is to find a suitable debt settlement company to work with in Halifax. They should be reputable, have experience in the space, and be someone you are comfortable working with.
Just make sure to ask your debt settlement company these questions.
Once you have selected the debt settlement company that you will work with in Halifax, the next thing to do is come up with an offer that you will send to your lenders. It needs to not only be one that works for you and saves you money, but is also one that works for your lenders. Once you have crafted the offer, the debt settlement company will send it over.
Soon, you will hear back from your lender(s) and you will find out if it has been accepted or not. If the lenders accept your settlement, simply pay them the agreed upon amount and you will be freed from the remaining amount.
Keep in mind that you could potentially negotiate your own debt settlement, but the success rate is normally much higher when you work with a professional.
How Does Debt Settlement Affect Your Credit?
While a debt settlement is a great way to not have to pay off your potentially large debts in full, it comes at a cost. Once your debt is settled, you are likely to see an immediate drop in your credit score. So, debt settlement will negatively affect your credit. However, the amount that the debt settlement negatively affects your credit will depend on your unique situation. The higher the amount that your creditor writes off and you don’t pay, the greater the negative impact will be on your credit score.
Click here to more ways that a debt settlement affects your credit.
But while a debt settlement can sometimes hurt your credit score, that isn’t a reason not to try out a debt settlement. See, sometimes it is more valuable to get a fresh start (with no debt) and a low credit score than to continue being unable to pay off your debts in full. You can come back from bad credit relatively quickly if you are serious and dedicated to it, and it will feel absolutely wonderful to be free of that debt that has been eating away at you for years.
Take a look at this infographic to learn more about credit scores.
Advantages and Disadvantages of Debt Settlement in Halifax
While debt settlement is a popular debt relief option in Halifax, it is not the only one you should consider. There is credit counselling, bankruptcy, consumer proposals, and debt consolidation which are all various ways to manage your debt in Halifax. In order to make your decision a little easier, we have decided to include a few advantages and disadvantages of debt settlement so you can get a good idea of what you’re getting into.
Advantages
- Your debt-to-income ratio will immediately lower, which is a good thing
- There will be no more opportunities for late payments to accumulate on your credit report
- Your debts will be gone sooner and thus you can begin the process of rebuilding your credit
Disadvantages
- The debt settlement shows up on your credit report, which may stop other lenders in Halifax from approving you
- It doesn’t force you to change habits, so if you don’t, you could just find yourself in more debt troubles in the future.
Look here to discover more ways of conquering your high-interest debt.
Finding The Best Debt Settlement Plan For You
Feel that debt settlement is the right solution for your debt problems? If so, be sure to contact us at Loans Canada. We are confident we will be able to help you find a debt settlement company in Halifax!
