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With proper help you can

 Lower your monthly payments

 Reduce credit card interest rates

 Waive late fees

 Reduce collection calls

 Avoid bankruptcy

 Have only one monthly payment


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Debt settlement helps you repay bills fast

Watch video: How to settle your debt fast through debt settlement

Debt Reduction Plan is best when you want to:

 Stop getting threatening collection calls
 Pay portion of your debt, but less than what your creditors offering
 Pay one small monthly payment for all your debts
 Stop paying high interest and lower your monthly payment
 Protect your assets and pay off you debt faster

What is debt reduction plan and how does it help?

Debt Reduction Plan is a process where we arrange and make an offer to your creditors to reduce your principal and stop interest so you can pay off your debts within a period of 3-5 years. Debt Reduction Plan is favourable for those debtors who want to keep their properties, and have a regular source of income.

Debt Reduction Plan helps you :

Repay only a fraction of the debt owed with the maximum repayment period between 3-5 years

Not in jeopardy of losing other assets and their house or car

  Creditors and collection companies are no longer able to contact them for payment as it is the law

Interest will stop accumulating from the date of filing

Most of the wage garnishments will immediately stop

How much
debt reduction plan
can save you

Advantages of Applying For a Reduction Plan for Debt

 Get a mastery over your financial situation

With a debt reduction plan, you relief yourself of an unfathomable debt, then you will get back in control over your life and financial status.

Bargain to pay back only a portion of your debt

You could bargain with your creditors to pay back a percentage of what you owe, depending on how mush. For instance, you could bargain to pay back 30% of your debt supposing you owe $50,000 (meaning all you have to pay back is $35,000).

Merge debt into an adaptable monthly payment

With a debt reduction plan, your debt as contained in the signed contract (proposal) is merged into a workable monthly payment, which will be paid to your representative. You could make a bigger payment though, if your circumstances allow it.

Suspend interests starting from the file date

When you make sign a contract, all charges on your credit cards, and tax liabilities are suspended – implying you won’t have to accumulate any further interests.

Do not let your creditors file a lawsuit against you

With debt reduction plan, you do not have to put up with aggressive phone calls received from collection organizations; your creditors no longer have the right to get in touch with you or take further actions.

Guard your belongings (home, cars, RESPs, RRSPs, etc.)

If you have money save in RRSPs and RESPs; you have a car and a home, a debit reduction plan will see to it that these possessions are not taken away from you!

Prolong repayment period

Since it is allowed for a payment proposal to span across five (5) years, it is advisable that you extend your payment period so that you can better manage it (i.e. your payment).

Avoid liquidation

Debt reduction plan will protect you from liquidation.

Requirements to file a Debt Reduction Plan

  • 1 If you have debts going over $5000 but not over $275000 which does not include your home mortgage

  • 2If you have a good job and you can afford to make some payments every month

  • 3If you just can’t afford to repay all your creditors in full and with interest

  • 4 If you cannot get a debt consolidation as a result of your debts being too high even with a steady job

  • 5 If you do not want to go bankrupt because you either do not want to lose any of your assets like your car and your home or you would be subject to payments from surplus income with your current income

Settling debts on your own vs. settling debts with professional help

Settling debts on your own Settling debts with professional help
Negotiation You need to decide how much you can pay every month The settlement company analyzes your financial condition and decides upon an affordable payment
Mode of payment Usually you need to make one-time payment towards each of your accounts You need to pay an agreed upon amount to the settlement company every month
Fees You don’t have to pay anything other than the settlement amount to the creditors You need to pay a certain amount as professional fees
How to decide You want to save more money, but you should have proper negotiation skills to convince your creditors to agree to settlement You want complete professional guidance to settle your debts, though you’ll have to pay a fee for the services provided

Pros and cons of debt reduction plan

Pros:

  • A You can save money through debt reduction plan
  • B Affordable single monthly payment for all your debts
  • C Relief from nagging creditors
  • D Interest will be eliminated
  • E Wage garnishment will be stopped
  • F Court orders will be addressed
  • GEventual improvement to credit score

Tips to settle debt for 10 cents on the dollar

  • 1 Check the SOL period of your state: Creditors cannot sue you after the Statute of Limitations (SOL) period is over. This means creditors can’t garnish your paycheck or levy your bank account once the SOL period is over. So, you can choose not to settle your debt.
  • 2 But, there is one point you need to consider. The debt will still be there on your credit report for 7 years. So, you can’t expect that your creditors will remove the listing from your credit report.
  • 3 Check the status of your debts: Creditors are less likely to settle accounts on which you're current. So it would be best to settle accounts on which you are past due.
  • 4 Save as much as you can: Debt negotiators can’t start negotiations unless you save a specific amount in the trust account set up by the debt settlement company. So save as fast as you can in the trust account. This will help you settle your credit card debts quickly.
  • 5 Download a debt settlement letter: You'll need debt settlement letters at various stages of negotiation. First, you'll need this letter to propose a debt settlement plan to creditors. Next, you'll need another letter to propose what you want to pay in response to the settlement offer made by creditors.

After that, you'll need a letter of acceptance of the verbal offer. Finally, you'll need a proper debt settlement agreement letter. You can take a print out of debt settlement letters from here.

Do's and dont's of settlement

Do's

  • A Organize paperwork when you decide to opt for settlement
  • B Be proactive and contact your creditors when you face difficulty in managing any of your debt
  • C Always finalize through written communication and you can take help of debt settlement letters available online

Don'ts

  • A Don’t overlook the effect of settlement while deciding which debt relief option to go for
  • B Don’t opt for a settlement program without shopping around and comparing various debt settlement USA companies

Who should go for debt settlement programs?

When you are preparing a deal for your creditors, some principles must be followed as to the debts which can be included. Basically, a deal should be made available to unsecured creditors.Your unsecured debts should be listed. Some of these include

  Payday Loans

   Credit card debts

   Collection accounts

   Unsecured loans

   Personal loans

  Income Taxes

Student Loan ( 7 years old)

 

Secured Debts in Debt Reduction Plan

It is impossible to modify a secured debt using a debt reduction plan(proposal). A secured debt as the phrase implies, means that the debt has an asset backing: such as your car (should you obtain a vehicle loan), or your house (in case of a mortgage). If payment is not made on a secured debt, legally, the creditors have the right to acquire the asset agreed upon (creditors may even sell off the asset to recover their money). As long as the consumer proposal makes it clear, any loss on the agreed asset is an unsecured debt, which can be included in your debt reduction plan.

Assuming your secured debt, e.g., mortgage or car loan is in good standing, it will not be possible for creditors to demand that you surrender your asset, because you are in debt reduction program. If there are other faults, the creditors may be able to terminate the deal. If a deal is terminated, the loss may be included in the proposal.