Letters To Creditors in Canada - Third Step to Settling Overdue Bills
Contributed by Peter James
Wednesday, 23 May 2007
One of the most important things I recommend when it comes to settling
your overdue bills in Canada is keeping in touch with your creditors.
Even large impersonal corporations still have people managing your
account. So, in Letters to Creditors - Step One I suggested a sample
letter you can use when asking creditors to accept lower payments and
freeze interest and charges. Step Two offered a follow-up letter to use
if these Canadian financial institutions refuse to accept your
repayment proposal. But Step Three is a last resort if all else fails
Make a Full and Final Debt Settlement Proposal to Creditors
If your debt is simply too much to manage over the long term or worse a debt collection agency has taken on your debt
and you just want to get them off your back forever, it's time to consider clearing up the overdue bills with an ultimate
If you have a lump sum in savings or you can get hold of some money by selling a major item or falling on the mercy of a
generous relative, it is possible to make an offer of a ‘full and final settlement' in Canada.
This means that you offer to pay of a sizeable proportion of the debt on condition they write off the remainder.
The reason collection agencies might accept this is because they 'bought' your debt off your original lender at a discount
or your credit card company or bank/credit union is prepared to accept a lump sum from you as an alternative to putting
up with token monthly payments for years on end.
You will usually need to find around half of the amount you owe but according to Canadian credit counselling services,
some financial companies accept as little as 35% of the debt owed. If you need to pay off several creditors then divide
the money between them on a 'pro-rata' basis to ensure that each creditor gets a fair share of the money available.
One very important thing is never ever send any paym