There shouldn’t be an initial setup cost for an informal debt settlement. The purpose of an informal debt settlement is to lower the interest rate on your payments and potentially extend the payment period. Additional costs typically result from the accumulated interest charges over a longer repayment period.

If Orderly Payments of Debt doesn’t seem like a viable option for you or is not available in your province, there are other possibilities. Speak to a Licensed Insolvency Trustee for your options.

It is important to get any arrangement you make with your creditors in writing. While it may not be a legally binding contract, it is a useful document when discussing the termination of your informal debt settlement. If the creditor refuses to reinstate the informal debt settlement, you can file for a Consumer Proposal, which is legally binding when administered by a Licensed Trustee.

There is a small application cost, as well as the 5% annual interest accrued during the repayment term.

An informal debt settlement should be realistic. If your settlement is out of your financial reach you should consider other options to deal with your debt.

For residents of Quebec, there exists the Voluntary Deposit Law (formerly known as the Lacombe Law). You can use a portion of your earnings (as determined by law) to make monthly payments to the Courts. You’ll need to make sure you pay off 100% of your total debt with an annual interest rate of 5%. To learn more about the Voluntary Deposit Law, please contact your local courthouse.

A discharge releases you from the legal obligation to repay the debts you had as of the date you filed for bankruptcy, except for specific types of debts that are excluded by the law.

Much like buying a home it is recommended that you have a down payment for your vehicle purchase. Make sure your credit report is accurate before you apply for credit through a financial institution or car dealership. Create a budget! What payment is affordable to you? Don’t borrow more than you can afford to repay. Vehicles depreciate quickly and often need repairs before you have finished paying the loan. Ensure you budget...