man and woman having discussion while looking at laptop screen

Informal Debt Settlement

An informal debt settlement is a voluntary arrangement negotiated between you and your creditors, without the comfort of ensuring you have a legally binding agreement and the step-by-step guidance provided by a Licensed Insolvency Trustee. Your creditors have no legal obligation to work with you on creating a debt agreement and they could cancel it with little or no notice if it is not properly documented in a binding legal document.

How Informal Debt Settlements Work

To develop an informal debt settlement, you will have to first call each of your creditors directly and attempt to negotiate a repayment plan that’s within your budget and satisfies each creditors’ repayment timelines. Each creditor will separately want to negotiate interest rates, amounts and payment schedules. You will then be responsible for the payment obligations according to the terms of the voluntary agreement. The more creditors you have, the more challenging it can be to agree upon and manage each of these agreements.

Deciding on an Informal Debt Settlement Agreement

If you’re uncertain or uncomfortable about the risks involved with this type of debt agreement, talk to your local Licensed Insolvency Trustee to discuss whether it is a good choice for you. We will take the time to listen to your concerns, answer any questions and explain all of your options.

Life-Changing Debt Solutions is about finding the best choice that will work for you.

Latest Blog Posts

2025-08-25

12 holiday budgeting tips to stay jolly into the new year

Grant Bazian

Lifestyle Debt

Make a plan to reduce your holiday season spending – and stress – with our top 12 tips.

Read More

2025-08-25

Owe the CRA money? Steps to help you get back on track

John Athanasiou

Owing the government money can be very intimidating as it's assumed the government has a limitless ability to collect the debt through any means necessary.

Read More

2025-08-14

How to budget for summer vacation

Marianne Steele-MacSween

Vacation costs can add up quickly without proper planning. This guide can help you budget so that you can make the most of your trip without overspending.

Read More

Consultation icon