One of the most common tactics in Ontario to be relieved from debt is debt settlement. However, financial experts say that this is an extremely dangerous process because it always leaves consumers with credit records that are more damaged; hence, lead to deeper debt.
The worst thing about debt settlement is probably the fact that it can hurt the debtor’s reputation, both in debt management and counseling. Because of the rampant dangerous practices and scams in the industry of debt settlement, many consumers are less trustworthy and confused.
Well, this post will clarify major concerns about debt settlement Ontario agencies like that of CTL Laws and how they have managed to gain the trust of debtors. The information below will review debt settlement in a more detailed manner and explain why it has been often perceived as a bad idea.
Many debtors are struggling with more and more bills received every month than what they are able to pay. If this happens, you might start to think about working your debts with a debt settlement company. The truth is, these companies are helpful but consumers must learn about the services they provide before finalizing an agreement.
Here are the essential things you need to know if debt settlement is the answer to your piled up debts.
Companies involved in debt settlement usually approach creditors to negotiate a plan, each creditor will agree to cancel the loan in exchange for a lesser value than what the debtor owed in exchange for a one-time payment. Once the agreement is made, the debtor will pay a specified amount each month to be deposited through the account of the debt settlement company. Also, you will pay the services rendered by the company. When you agree to pay the amount in full and will be deposited in the account assigned by the debt settlement company, they will be in-charge to pay the creditor and your debt is paid.
These are a few more of the advantages of going with debt settlement:
- If you are current credit score is poor and you are having sleepless nights because of the bills you cannot settle, ask the help of a legitimate debt settlement company to negotiate with your creditor.
- If you are uncomfortable negotiating with your creditor because you do not have the negotiating skills, then a good and reputable debt settlement company can help you. They can give you a friendlier path to settle the debt with your creditor.
However, instead of negotiating with the debt settlement company, you can negotiate personally with your creditor. If you can get the total amount of money to pay the debt from one of your family members or other sources, it is advisable to negotiate directly with your creditor. This way, you can also ask them if you can pay less than the amount you owed so that you can pay the amount in full. If you cannot find the sum of money to pay the debt but you can save up for it, you can still negotiate with your creditor about the plan to pay off the debt within several months.