Monty,

I think Richard gave a real good description of his business and i would like to hear more what he has to say.

Cheers

Raymond... bankruptcy and debt settlement are about the same for the six year period.

After six years you can start fresh again.

If you declare bankruptcy a second time, the bankruptcy lasts on your credit report for 12-14 years depending on the province.

I think Richard has given a good description of his service.

http://www.collinsbarrowbrown.com/publications/understanding_consumer_proposals_(colour)_ottawa_web.pdf

Not too sure where you're from but in Ontario, having an R7 on your report for 6 years under a consumer proposal isn't any better for your credit than declaring bankruptcy. Sometimes worse; because under the latter you can acquire unencumbered assets after an absolute discharge, a condition likely to be more attractive to potential future creditors.

As per page 10 of the above link:

WHAT HAPPENS TO MY CREDIT RATING UNDER A CONSUMER PROPOSAL?

"Credit ratings are established and maintained by the credit bureaus and credit grantors. Our understanding of current rating procedures is as follows. In Ontario, upon filing a Consumer Proposal your credit rating will be R7. R1 is the highest rating and R9 the lowest. If your credit rating was already lower than an R7, an R8 or R9, it will remain at that level. The rating will remain on your record for SIX years from the date of
filing the Consumer Proposal. In the future, your ability to obtain credit will turn on your ability to convince potential lenders of your financial responsibility and financial capacity (income, work and place of residence stability etc.)."

Ray

Nice article Richard C.

Maybe Shania Twain called you up to go bear hunting,who am i to say she didn't.

Debt settlement is NOT a guaranteed debt elimination plan. A DS company cannot promise a certain outcome… It’s impossible to predict exactly how a creditor will react to a settlement offer on a debt. There are so many factors to consider.

With a large database of clients and creditors we can now “forecast” what might happen but that’s no different then how meteorologists forecast weather patterns based on many years of data. DS is no different, and in many cases its outcome is less predictable. If you want straight forward and a guarantee then I give you “death and taxes”.

IMO DS companies should offer you a service guarantee. No settlement = no fee. That way the DS company is motivated to get the job done. Total Debt Freedom offers this guarantee.

Creditors do sue people in debt management plans if they want to. DS is no exception. ANYTIME you are in breach of a contractual arrangement to pay a debt you are exposing yourself to a lawsuit. This is true whether or not you are in a DS plan or not.

To minimize our clients being the target of a lawsuit we strictly underwrite our applicants. People with sufficient assets are refused or told to liquidate them to pay in full. We don’t associate our name with consumers who would be perceived by the banks to “rip off” their creditors. You have to be in legitimate financial hardship to be a candidate for a reputable DS company to take you on.

Certain creditors are VERY litigious during the collection cycle, so people do get sued. It is extremely rare for our clients to be the target of a lawsuit but just about everyone gets the threat.

At the end of the day, creditors are under no obligation to settle. Negotiating settlements is not easy. It takes work and is about give and take. Any reduction in the debt is a gift whether it is reduced by 30% or 90%. Everyone’s situation will vary.

Regarding the DS effect on credit vs. bankruptcy. DS is much kinder to your credit ratings then bankruptcy, consumer proposals and credit counselling. Bottom line is your credit will not improve until the settlement is paid. Incidentally, I have seen credit scores improve on average 100- 150 points over 12-14 months post DS.

People confuse credit and getting out of debt… The best way to put it is this: If you have $xx,xxx of debt, then that shows me you cant afford the credit you already have. What do you need more of it for right now? Focus on settling the debt; forget about your credit for now. Credit is easy to fix. Just read Monty’s credit repair guide.

"Today I paid out $2400.00 to settle a debt that was $24,000. I know I am getting off easy..."

Shania Twain just called me up and asked me if I'd like to go bear hunting with her up in Timmins.

Ray

It depends whether or not the card agreement contained what's legally called a "joint" or "joint and several liability" condition.

http://en.wikipedia.org/wiki/Joint_and_several_liability

If it has one of theses conditions, you would become responsible for the debt if the other party named on it was given an absolute discharge in bankruptcy. If it doesn't have such a term, you are not responsible for any debts incurred on the card.

Assuming, the card does contain such a condition - and you need to check - if the card was defaulted on or no payments or SIGNED written acknowledgments were provided since the original default, the limitation period for filing court action in Ontario is 2 years if it was defaulted on AFTER Jan.1, 2004. If the card was defaulted on BEFORE Jan.1, 2004, then a 6 year limitation period for court action applies.

Even if the second case holds, the debt is likely coming up for being statute barred from legal action soon if it's not already so. Collection agencies always like to make last gasp bluffs about such debts as they approach their statue of limitation date. If anyone was going to sue you, they certainly would have done so a long time ago.

Ray

Thank you for you kind words Monty. I did learn a lot from my experience on settling most of my debts this time around. I believe if I filed for bankruptcy the lesson would have not been learned. Today I paid out $2400.00 to settle a debt that was $24,000.I know I am getting off easy, but I hated the fact I had to handover $2400.00 so close to xmas.Everytime I made a settlement on a debt, it made more not to want credit in the future. I know I need at least one credit card in our society, but I am not rushing out to get one till I settle every last debt I have.

misser55... that's a question foranother thread...
did you sign on the contract for the original debt?